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KSM Blog | Katz, Sapper & Miller CPA

New Financing Options for Small Business

Posted 2:43 PM by

Are you a manufacturer with a major order that is dependent upon obtaining financing for plant expansion? Are you a life science company that has identified a promising new application for technolgy under development but are struggling to find the financing necessary to move the opportunity from planning stages to implementation? Are you in the forecasting and planning stages for 2011 activity yet are uncertain about the availability of capital? 

Legislation recently signed into law provides expanded borrowing options for small business. The Small Business Jobs Act will provide additional money to support Small Business Administration (SBA) loan programs and will provide capital to a new Small Business Lending Fund that targets community banks. The provisions of the new law are intended to provide lending options to businesses that might not qualify for loans lacking credit enhancement.

Key elements of the SBA program include:

  • An extension through December 31, 2010, of the SBA Recovery loan program. This program provides a 90 percent guarantee of bank debt and reduced program fees.
  • Owner-occupied commercial real estate mortgages may be eligible, in the case of certain small businesses, for refinancing through the 504 loan program.
  • An increase in the maximum loan size for certain loan programs. In general, 7(a) and 504 limits will increase from $2 million to $5 million. For manufacturers the 504 program limit will increase to $5.5 million.
  • The maximum size of working capital loans (SBA Express program) will increase from $350,000 to $1 million.
  • The Dealer Floor Plan program will be extended to 2013. 

About the Author
Christopher Bradburn is a director in Katz, Sapper & Miller's Real Estate Services Group. Christopher leads the firm's cost segregation practice. He also provides accounting and tax support for a wide variety of practices. Connect with him on LinkedIn.

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