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Archive for March, 2009

Stimulus Package!

March 14, 2009 By: Ron Coleman Category: Financial

Yesterday I had the opportunity of meeting with Stan Nakano who is the District Director of the Small Business Administration.

We spent most of the time talking about the stimulus package, at least the portion that the SBA is receiving.

Nationwide the SBA is receiving $730 million dollars to help businesses grow and expand.  It will be used as follows:

$375 million will be used to offset fees for borrowers and lenders to make loans for expansion more affordable. 

On 504 loans (this is the loan for buildings, etc), the 1-1/2% origination fee will be waived.  For the first time, some of the funds from this loan can be used for refinancing other debt, but some must still be used for building.

7A loans the guarantee for the lender is increased to 90%.  This means that if a lender finances a 7A SBA loan to a business, and that business fails, the most the lender will be out will be 10%.  The 90% is up from 75% on loans over $750,000 and up from 85% on loans up to $750,000.

$255 million will be for a newly created form of loan by the SBA that they will make available up to $35,000 to help small business who are delinquent in other loans.  This is 100% guaranteed to the lender and includes:

  • No payments for one year
  • No interest
  • 5 Year loan
  • Borrower must prove his business is viable
  • Must be secured by collateral
  • Cannot be used to catch up payments on other SBA loans

Since they are still creating this loan and writing the rules, it will not be available for a little while, yet.

I also learned that unlike many other areas of the U.S. that are way down on lending, the Utah District has lent more SBA dollars over the past 8 months than any other district in the nation.  (Even though by size the Utah District is 45th if you consider population)!

Also, Zion’s bank is the number one SBA lender for volume in the Utah District!

So in a nutshell, that is most of what we talked about.  Hope it helps you!