Currently, there is a bill in congress - H.R.5297 (the “Jobs 3 Bill”) - that proposes a $30 billion package for community banks to use for small business loans. This bill reinstates some of the benefits that helped banks make loans during the time the American Recovery and Reinvestment Act (ARRA) was in effect, and adds additional provisions that will help small business owners moving forward.
This bill will help banks like Ridgestone support small businesses in the coming months. We all know that small businesses are major contributors to our economy and that the current economic conditions have made survival and growth difficult. This bill will be a particular help to manufacturers, who provide many jobs for people in the Midwest.
There are two reasons the passage of this bill is so important:
- The bill will enable banks to help borrowers with higher financing needs by raising the loan limit size from $2 million to $5 million.
- The bill will reinstate the 90% guarantee on loans by the SBA, which will make it easier for lenders to be comfortable making loans
Additionally, this bill increase the maximum SBA size limits for an eligible business to allow larger businesses to qualify for SBA loans. This increase will be permanent and will allow businesses with a (tangible) net worth of $15 million (up from $8.5MM) and a 2-year average (net) income of $5 million (currently $3MM) to qualify for SBA loans. Also, Energy efficient or Green 504 loans will increase to $5.5 million as will 504 loans for “small manufacturers.”
If you agree with us, be sure to contact your representatives to let them know you believe this $30 billion package should pass. Small businesses need financing to grow and banks like Ridgestone need the ability to provide these very important government-guaranteed loans.