The Small Business Administration's loan guarantee programs can't revive credit access because most small businesses use other types of credit
The Obama Administration recently proposed changes to the Small Business Administration's loan guarantee programs
to help small business owners whose access to credit has been reduced as
a byproduct of the financial crisis. According to a Feb. 5 White House press
release about the plans, "The President is proposing to temporarily
increase the maximum SBA Express loan size to $1 million" and "to
temporarily allow for the refinancing of owner-occupied commercial real
estate (CRE) loans under the SBA's 504 program." In the same release,
SBA Administrator Karen Mills explains that "more small business owners
will have quicker access to…capital to help restock inventories and
support larger revenue sales" and "the ability to refinance into SBA's
504 loan will give them the chance to lock in long-term, stable
financing."
However well-intentioned these proposals might be, I don't think they will help the typical small business because SBA-backed loans aren't an important source of financing for small businesses.
To read the full, original article click on this link: SBA Loan Proposals Will Help Few Small Businesses - BusinessWeek
Author: Scott Shane
