SBA Lending Up, SBLF Materials Available

January 4, 2011

Access to capital continues to be a significant challenge for many small businesses. Unfortunately the issue continues to take two steps forward and one step back as progress is continually accompanied by funding challenges. While the Treasury Department just this week finally released details for the Small Business Lending Fund, the SBA announced–amid resurrection of the Recovery Loan Que due to lack of funding–that it approved in first quarter FY10 its highest volume of loans for any first quarter of any fiscal year in the agency’s history.

Small-Business Stimulus Provisions Extended

When the U.S. House of Representatives and the U.S. Senate passed short-term spending measures prior to their December adjournment, they provided a temporary extension of the small-business provisions of the American Recovery and Reinvestment Act (ARRA), which reduced the upfront borrower fees for U.S. Small Business Administration’s (SBA’s) 7(a) and 504 lending programs and increased SBA’s 7(a) loan guarantee to 90 percent.

While the provisions were reauthorized through March 4, 2011, no additional appropriations were provided, however, and the agency already has allocated the additional funding supplied to it in September, when President Barack Obama signed the Small Business Jobs Act.

According to the SBA, from Sept. 27 through Dec. 31, 2010, the agency approved $10.3 billion in loan guarantees, supporting more than $12 billion in lending to small firms. This represents the highest volume in the first quarter of any fiscal year in the agency’s history. In a single week — Dec. 1 8-24 — the SBA supported $1.95 billion in small-business loans, the highest dollar volume since the agency began tracking its weekly loan volumes. In total, the SBA approved nearly 22,000 small-business loans during the period.

Absent additional appropriations for the extension of the small-business provisions of the stimulus package, the agency has resurrected its SBA Loan Queue, so that any dollars that come available from loan cancellations in the intervening weeks can be redirected to new loans with the lending enhancements.

Small Business Lending Fund (SBLF)

Although the U.S. Department of the Treasury (Treasury) was expected to release the criteria small banks must meet in order to participate in the $30 billion Small Business Lending Fund (SBLF) in December, the details finally were released this week.

Lending institutions interested in participating in the SBLF program can find detailed materials, and the necessary terms sheets and applications at

The SBLF fund was created in September 2010 when Congress passed and President Barack Obama signed into law the Small Business Jobs Act. In December, NSBA joined Sens. Mary L. Landrieu (D-La..), chair of the U.S. Senate Committee on Small Business and Entrepreneurship, and George LeMieux (R-Fla.), in calling for the swift implementation of the SBLF and the State Small Business Credit Initiative, which also was created by the Small Business Jobs Act.

According to an internal poll conducted by the Independent Community Bankers of America (ICBA), nearly a quarter (24 percent) of their 5,000 community-banks members planned to utilize the SBLF. This means 1200 community banks stand poised to increase their small-business lending.