Recovery Act Funding to Expand Microlending to Small Businesses Across the U.S.
Article by Kari Larson
With the American Recovery and Reinvestment Act funding an added million for loans, plus million for technical assistance, the U.S. Modest Company Administration [SBA] is expanding its Microloan plan and rising access to capital for modest corporations across the nation.
The system is shifting to funding provided below the Recovery Act, now that it has exhausted the normal FY 2009 appropriations for million in loans and million in technical assistance. With the additional resources, SBA is focused on adding new lenders and encouraging entrepreneurs to seek out SBA-backed microlenders to finance their corporations.
“SBA’s Microloan program supplies a vital source of capital for entrepreneurs — which includes girls, reduced-revenue men and women and minorities, who usually have difficulty acquiring capital to start and grow their companies,” mentioned SBA Administrator Karen G. Mills. “With these resources, we can place a lot more entrepreneurs and little-company owners in a position to succeed and produce jobs that will, in turn, support drive our nation’s economic recovery.”
Because the Recovery Act, SBA has approved eight new applications from lenders to join the Microloan system, and has 15 new loans to microlenders for .7 million in Recovery Act funds ready to be disbursed. Of these 15 loans, eight are for new microlenders.
The approved new microlenders are: Vermont Community Loan Fund Inc., of Montpelier, Vt Neighborhood Development Center, of St. Paul, Minn. Cen-Tex Certified Advancement Corp., of Austin, Texas The Emperor Organization, of Tallahassee, Fla. Staunton Creative Community Fund Inc., of Staunton, Va. Lane MicroBusiness [d.b.a. eDev], of Eugene, Ore. FINANTA [formerly recognized as American Street Economic Services], of Philadelphia, Pa and ACCION USA Inc., of New York, N.Y.
SBA’s Microloan system supports microlenders by providing them with up to .5 million in reduced-expense loans from SBA to finance their lending to modest organizations. SBA’s interest rate to microlenders is based on the five-year Treasury rate, with adjustments tied to a microlender’s typical loan size.
Microlenders use the SBA funding to present loans of up to ,000 to entrepreneurs. Loans can be used for working capital and acquisition of materials, supplies, furniture, fixtures and equipment.
SBA also supplies grant funding to microlenders, to finance technical help and counseling programs for their borrowers — like staff, classroom coaching, and occupancy fees. SBA’s reimbursement is capped at 25 % of the microlender’s outstanding SBA loan portfolio.
Organizations interested in becoming SBA microlenders ought to meet particular criteria — in terms of organizational status, microlending experience, and matching requirements from non-federal sources. For far more details, please visit: http://www.sba.gov/services/financialassistance/sbapartners/microloan e-mail email@example.com or, call 202-205-6485.
Entrepreneurs who wish to find out about SBA’s Microloan plan can go to: http://www.sba.gov/services/financialassistance/sbaloantopics/microloans/index.html.
TAGS: 2009, ARRA, capital, economic recovery, entrepreneurs, financing, jobs, Karen G. Mills, lenders, lending, loans, microlenders, microloan, Recovery Act, SBA, little company, technical help, ACCION USA Inc., acquisition, American Recovery and Reinvestment Act, banks, borrowers, business, business counseling, company program, Business Plan Pro, enterprise organizing software program, Cen-Tex Certified Development Corp., classroom coaching, develop jobs, disadvantaged, The Emperor Organization, entrepreneurship, gear, FINANTA [American Street Financial Services], fiscal year, fixtures, funding, funds, furniture, FY 2009, grant funding, grants, job creation, Karen Gordon Mills, Karen Mills, Lane MicroBusiness [d.b.a. eDev], reduced-cost loans, low-revenue, materials, minorities, minority, Neighborhood Improvement Center, operating capital, Recovery.gov, reimbursement, little businesses, staff, staffing, Staunton Inventive Community Fund Inc., succeed, success, supplies, U.S., U.S. Department of the Treasury, U.S. Tiny Business Administration, United States, USA, Vermont Community Loan Fund, females, functioning capital
About the Author
Kari Larson, editor and publisher of GoodBiz113 [http://goodbiz113.blogspot.com], is committed to showcasing small-biz policies and partnerships that serve the greatest probable win-win-win good.
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