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SBA Doing the right things to help get capital flowing

January 20th, 2009 · 2 Comments

A recent press release from the SBA highlighted some of the key initiatives that are under way to help small businesses who are struggling with existing SBA loans as well as get new capital flowing into the market for small businesses.   The full press release can be found here: http://www.sba.gov/idc/groups/public/documents/wi_milwaukee/credit_thaw.pdf

Just a few thoughts regarding the different initiatives:

Alternative Base Interest Rates: by adding monthly LIBOR rates to the approved list for consideration on interest rates give the lender flexibility in choosing or avoiding a certain rate based on the fluctuation of that market.

Weighted Average Coupon Pools:  Very interesting…basically creating another security that can be sold to investors that is in essence backed by the government so you know it won’t default….at least not before everything else in a cataclysmic meltdown, which we haven’t seen yet…close but not yet.   It give the lenders a home to sell their loans that wasn’t available before.

Term Asset-Backed Securities Loan Facility:   (TALF) part of the ongoing activity to restore confidence in the secondary market and create liquidity for the release of funds.   This compliments the Weight Average Coupon Pools.   SBA has recognized that the banks will sit on their funds and be slow to lend if they don’t have confidence they can sell those notes to get more liquidity to keep loaning money to qualified businesses.

The SBA has been very proactive in getting the word out about these programs, stream lining their operations to make sure that loans can be processed in a more timely manner, and in meeting directly with lenders and regional offices to educate them and encourage them to get back into the lending game.

And there are lenders making SBA loans.   I was on a panel for the SBA in December and a fellow panelist from a local Atlanta Bank, announced proud and strong that they were making SBA loans.   This lender had not been involved in loaning to residential developers so had not had the short fall and defaults that had hurt so many other banks.   So just because your corner big box bank said no, does not necessarily mean that it is really a no….just depends on who you ask and the quality of your package.   Kind of like dating I guess.

LAUNCHfn has a review program to help companies determine if they are qualified to seek SBA or other financing, then prepare the package and get it in front of the right kind of lenders.    We continue to believe that there are funding sources available to qualified companies.   The problem is that most companies seek the wrong kind of capital for their stage and have the wrong kind of documents.   We work with them to get it right.   SBA is working to make sure the money is there for them.

Visit www.launchfn.comfor more info and to go the Get Started tab to learn about loan applications and INFO & LINKs for info on qualifying for an SBA or other type of loan.

We are planning an upcoming radio show to interview an SBA Lender and SBA representative to talk more indepth about these programs and the capital markets.  Tune in on Fridays at NOON Est at www.blogtalkradio.com/karen-rands


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Tags: Current Financing Trends · Entrepreneur Biz-Buzz · In The News

2 responses so far ↓

  • 1 Sandra Noble // Jan 23, 2009 at 11:03 pm

    The link in this article fails. Looks like SBA redesigned their website.


  • 2 ebsblog // Jan 26, 2009 at 7:57 am

    Thanks Sandra, I found the original and added it back in so the link works now.

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