SBA to Expand Loan Eligibility

By Suzia van Swol, University of New Mexico, Talk Radio News Service
U.S. Small Business Administration announced that it will expand eligibility for loans, planning a move to make more than 70,000 additional small businesses and auto dealerships eligible for these loans. The program should go into effect early next week through Sept. 30, 2010. Businesses will qualify based on net worth and average income. Net worth is not to exceed $8.5 million and after taxes cannot exceed more than $3 million for the two preceding years.

The SBA has taken these types of actions in the past during difficult economic times, such as in 1993 when small businesses also took a hit under the administration of George H.W. Bush.

The new plan with help unlock financing for those who want to buy and sell cars. Brian Deese, Economic Advisor to President Obama said that the administration are excited to announce that General Motors Acceptance Corporation has reached an agreement with Chrysler to provide them with auto financing. In turn GMAC will receive capital from the government. “This step taken today could more than double the number of dealers, auto-dealers, eligible for the SBA-7A loan program which is a really important expansion at a time when dealers when the industry overall is going through a very difficult restructuring process,” said Deese.