The Small business administration has released the rules for a New lending program. Companies that are facing foreclosure on their buildings are the target of this loan program. There are very large limitations on the program that could prevent businesses that really need the help from getting it. Article resource – New SBA lending program to start Feb. 28 with heavy restrictions by MoneyBlogNewz.
Rules announced for New SBA financing
Many businesses have been waiting for the lending program rules from the Small business administration since Jan of this year. The program was passed by Congress last year, and the SBA has been working on implementing the rules since then. On Thurs, Feb. 24, the rules were officially declared. The program will offer New loans for businesses with mortgages coming due within the next 24 months and will cover underwater mortgages. However, the owner of the business will be required to put 10 percent of the loan amount on the line in money or equity of another property.
What limitations are placed on the Small Business Administration program
Help from the Small Business Administration financing program is intended to give companies a helping hand. Really, this ought to stop foreclosures in the company. Business watchers, however, are concerned the limitations of the lending program could cut out so many businesses that it could be practically ineffective. Any businesses that don't have the down payment money available, that can't pay the additional 1 percent fee or that already have short-term SBA mortgage loans aren't allowed to get the loans. Probably the most help will be going to businesses that are close to shutting down however might still work with the rules, the SBA states.
The purpose of a small company loan
Getting small businesses the help they need to stay open is a tricky challenge, especially because payday loans are generally too small to help companies. Whether or not the economy is doing well, companies might just fail. You will find things that have to be figured out. This contains finding which businesses will really succeed. About $15 billion is being loaned to small businesses from the government. It needs to get paid back. The SBA program is there to help businesses that really need it. These are only the companies that will work though.
Articles cited
LA Times
articles.latimes.com/2011/feb/18/business/la-fi-sba-loans-20110218
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