2 SBA programs run out of stimulus money

Small businesses in the Dallas area and across the country must now join a waiting list if they want an SBA-guaranteed 7a or 504 loan with reduced fees or a higher guarantee amount.The SBA's standard 7a and 504 loans and its America's Recovery Capital loans, which provide up to $35,000 in interest-free loans to help small businesses meet existing debt payments, still are available.

The SBA said new loan volume could fall if more funding isn't found.

Since February, the SBA has supported more than $16 billion in loans nationwide, said Hayley Metz, an SBA spokeswoman in Washington, D.C.

The SBA's Dallas-Fort Worth office was the nation's No. 2 small-business lender this year after Los Angeles. The D-FW office approved $512.3 million in loans from late February through Nov. 20.

"Last week, we did $68 million" in loans, said Herbert Austin, director of the SBA's D-FW office, which covers 72 counties. "We don't even do that many loans in a single month."

The SBA said that by Monday it had exhausted $375 million in American Recovery and Reinvestment Act funds for its 7a or 504 loan programs. The agency used the money to temporarily reduce loan fees and raise its guarantee on some loans to 90 percent from 75 percent.

Earlier this week, the SBA started a transition period: Small businesses that can wait for funding can join the Recovery Loan Queue. Loan applications with conditional approval land a spot on the waiting list. The SBA's Web site on Wednesday listed 514 applications for 7a loans totaling $221.4 million."The [Obama] administration is supportive of extending our funding through Feb. 16," which is when the stimulus programs are authorized to end, Metz said. "We have been talking with Congress to see if this will be possible."

One official said the amount needed is about $100 million.

President Barack Obama has said small businesses are key to economic recovery because they drive U.S. job growth. His administration has launched several lending initiatives to help small-business owners through the credit crunch and recession.

SBA borrowers with Recovery loans say they've created or saved hundreds of thousands of new jobs, Metz said.

Overall, the Recovery Act awarded $730 million to SBA. A little more than half went toward reduced fees and higher guarantees on 7a and 504 loans and the rest is being used for other loan, surety bond and investment programs.

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