SBA to Reactivate Recovery Loan Queue

Michelle Samaad
February 25, 2010 | COMMENTS

The SBA has notified credit unions and other lenders that it will reactivate the Recovery Act loan queue by February 22 to ensure that the $125 million appropriated to the agency in December will go out the door much faster to small businesses.

The SBA received $730 million through the Recovery Act including $375 million to support raising the government guarantee to 90% on its 7(a) loans and reducing some lender and borrower fees on its 7(a) and 504 loans. The funds ran out in November 2009. SBA received an additional $125 million appropriation in December 2009 along with authority to continue both of the programs through February.

The agency said it is in the process of finalizing the plan for transitioning its 7(a) and 504 programs back to their pre-Recovery Act terms and communicating those plans with its lending partners. This plan, when implemented, will include re-activating the Recovery Act loan queues no later than February 22. The queues will operate in the same manner as when originally implemented in November 2009. 

The authorization for the 90% guarantee on 7(a) loans ends February 28, though funds may be exhausted sooner, the SBA said. Applications in the queues after February 28 will only be eligible for decreased or eliminated borrower fees when funds become available.

Small business owners and lenders will have transparent access to the queue via www.sba.gov/recoveryq and will be able to remove themselves from the queue at any time to be considered for a non-Recovery SBA loan with all applicable fees and, for 7(a) loans, standard guaranty levels.

This article was originally published in Credit Union Times at www.cutimes.com and is reprinted with permission.