Hamernik Headlines

SBA Increased Guaranty Deadline

Posted on 26. Feb, 2010 by admin in Hamernik Headlines, Industry Insights

Currently, the American Recovery and Reinvestment Act of 2009 contains provisions that authorize the Small Business Administration to do the following:

1)      Provide fee relief for certain 7(a) and 504 loans through September 30, 2010, and

2)      Offer an increased guaranty of up to 90% on eligible 7(a) loans through February 28, 2010.  Only loans up to $1.5 million are eligible to receive the 90% guaranty; loans over $1.666 million receive a smaller portion of the guaranty increase.

The fact that there are two different expiration dates in the Recovery Act complicates the funding process.  Essentially, loans that are not funded by February 28, 2010 will only be eligible for the fee relief, not the higher guaranty since the authority to offer the increased guaranty will expire on February 28, 2010. 

 This deadline is enforced not only on new loans that are currently in the Recovery Loan Queue waiting for funding, but also on loan increases, which, if not funded by March 1, will not be eligible for the 90% guaranty.

 A determination by Congress should be made known in the next few hours.  Please visit the National Association of Government Guaranteed Lenders at for more information about SBA programs and the upcoming deadline, or the SBA’s website at www.sba.gov/recoveryq.

Tags: 2010, American Recovery and Reinvestment Act of 2009, deadline, February 28, guaranty, hamernik, Headlines, lending, NAGGL, National Association of Government Guaranteed Lenders, SBA, small business