On March 16, 2009 President Obama, in a long awaited address, finally reached out to the 27.2 million small businesses in this country and extended his hand. The equally popular U.S. Patriot Express Loan Program for veterans and their spouses or windows, goes to $500,000 and is also guaranteed now to 90%. According to one Libertarian scholar, there is no factual reason to base policies on the idea that small businesses are more deserving of government favor than big companies.
13. The business concern’s current financial statements must exhibit positive net income, positive net equity and positive working capital at the time of application submission. The agency sought to ameliorate the consequences of the Great sought to achieve this through the establishment of a loan program to support businesses adversely effected by the Great Depression.
This also means the traditional robust secondary market for purchasing government backed loans, once it starts to kick-in, will also find them desirable for purchase in investment pools. The banks have the right to decide the type of credit programs they would offer.
SBA loan programs historically had guarantees of 85% for loans of $150,000 or less and 75% for loans greater than $150,000 (13 CFR Part 120). These articles tell you about the easy and most effective ways to raise money for businesses. Lenders take quite a few factors into consideration while extending these loans.
The importance of this for the borrower is that because of the assurance the funding bank receives from the Small Business Administration they are able to offer more aggressive loans than would be possible. This helps the administration in managing the business process and prevent wastage of time and resources.