Economic Recovery for Small Businesses: Now is Not the Time to Pull Back
As I travel around the country, I meet many small business owners who are poised to take that next step to grow their business and create jobs. In fact, this morning’s USA Today looks at one of those business owners - Amarjit Kaur who runs a convenience store and gas station in Wood Village, OR. Amarjit has been approved for an SBA loan so she can buy the property she now leases. But today her application sits in a queue waiting for passage of the Small Business Jobs Act currently before the Senate.
Here’s what’s happening: Up until a few months ago, SBA was able to waive the fees for SBA loan borrowers. This allowed small business owners to put more money back into their business. In fact, these fee reductions will save Amarjit about $35,000. At the same time, we were able to increase the government guarantee on SBA loans, to encourage more banks and credit unions to go ahead and make SBA loans to good, creditworthy small businesses.
This worked. SBA lenders approved about 70,000 SBA Recovery loans for small businesses since the Recovery Act passed, nearly $30 billion in total. And, we brought more than 1,300 lenders back to making SBA loans at a time when other banks were cutting back their small business lending.
Unfortunately, the funding for these popular enhancements ran out at the end of May – just when small business owners like Amarjit needed it. With support in Congress for extending these successful loan enhancements, we started the Recovery Loan Queue, a stand-by list just like at the airport.
Today, that list is at nearly 1,000 small businesses long, including Amarjit’s, totaling almost $500 million in loans. With the passage of the Small Business Jobs Act, SBA will be able to fund these loans. Additionally, among other programs, the Act will create the Small Business Lending Fund to provide additional capital to small, community banks so they can boost their lending to small businesses locally.
As Amarjit’s story points out, now is not the time to pull back. In communities all across the country there are business owners just like her who are in a position to do exactly what our economy needs them to do – grow and create jobs. With the Small Business Jobs Act, we can be the very partner these business owners need by giving them the tools to continue to drive our economic recovery.
Karen Mills is the Administrator of the Small Business Administration