MCLEAN, Va., Sept. 29 /PRNewswire-USNewswire/ -- In a ceremony at the White House Monday, President Barack Obama signed H.R. 5297, the Small Business Jobs and Credit Act of 2010 into law. On the podium with the President were a number of small business owners who personally benefitted from SBA loans along with several key people involved in crafting and passing the legislation. SBA Administrator, Karen Mills, Secretary of the Treasury, Tim Geithner, Senator Mary Landrieu, Chair of the Senate Committee on Small Business and Entrepreneurship and Melissa Bean from the House Committee on Small Business were among the group that joined the President for the ceremony.
President Obama pointed out, "Government can't guarantee success, but it can knock down barriers to success, like the lack of affordable credit." He went on to say, "We're going to make more loans available to small businesses. Right now, there is a waiting list for SBA loans more than 1,400 names long. These are people who are ready to hire and expand, who've been approved by their banks, but who've been waiting for this legislation to pass. Well, when I sign this bill, their wait will be over."
America's Certified Development Companies (CDCs), the economic development companies that provide SBA 504 loans to small businesses, can breathe a collective sigh of relief now that H.R. 5297 is law. Many of their small business clients were eagerly awaiting the passage of this key legislation so they could proceed with their projects.
SBA 504 loans provide long-term, government-guaranteed financing that assists small businesses purchase, construct or renovate commercial real estate. They are also used to purchase long-term capital assets like expensive equipment and machinery. Now, many more small business owners across the country qualify to receive SBA 504 loans.
NADCO President, Chris Crawford, who was in the audience for the signing ceremony remarked, "The signing of this important bill represents the realization of a legislative effort that began more than two years ago for the CDC industry. We are extremely grateful for the leadership of Senator Mary Landrieu, Chair of the Senate Small Business Committee. She pressed very hard for this legislation and she never gave up." He continued by saying, "We also wish to acknowledge the efforts of Senator Olympia Snowe, Ranking Member of the Committee on Small Business and Entrepreneurship, and Speaker of the House Nancy Pelosi. Their support was instrumental in securing the enhancements we now have in the SBA 504 loan program."
Many more companies are now eligible for SBA 504 loans. The size of small businesses that qualify was increased. Those businesses having a tangible net worth of $15 million and 2-year average net income after Federal income tax of $5 million are now eligible. Additionally, the maximum loan size was permanently increased to a range of $5 to $5.5 million. Of special importance to small businesses that are struggling with existing high-interest loans or up-coming loan balloon payoffs, the SBA 504 loan program can now be used to refinance existing debt at lower rates for longer terms.
There was also $505 million included in the legislation to continue fee relief on SBA 504 loans through the end of 2010. This fee waiver was first enacted in February 2009 as part of the American Recovery and Reinvestment Recovery Act (ARRA), and the new funds will allow borrowers who applied for SBA 504 loans under the ARRA program to save thousands of dollars in loan fees.
Small businesses will be the direct beneficiaries of this legislation but the big winner will be the American economy since all SBA 504 loan recipients are adding jobs in their communities. Since 1986 the Certified Development Company industry has provided nearly $60 billion worth of financing to over 123,700 American small businesses resulting in the creation or retention of over 2.2 million jobs.
Contact a Certified Development Company to discuss the program or visit the NADCO website at www.nadco.org for additional information.
About the National Association of Development Companies (NADCO):
Created in 1981, the National Association of Development Companies is the trade association for America's Certified Development Companies (CDCs). Certified by the U.S. Small Business Administration, CDCs are community-based economic development organizations that serve their local communities and states, and are dedicated to the promotion of small business expansion and job creation through SBA's 504 Loan Program. In addition to the 504 program, many CDCs also provide small businesses with access to other Federal, state and local economic development loan programs. These programs provide both long and short term funding for borrowers. For more information, please call (703) 748-2575 or visit www.nadco.org.
SOURCE National Association of Development Companies (NADCO)