WASHINGTON – President George W. Bush signed legislation Monday that will increase loan authority for the U.S. Small Business Administration’s flagship 7(a) loan program by more than $3 billion. The 30 percent increase in small business loans for the current year will allow the SBA to lift a three-month-old cap of $750,000 on 7(a) loans and drop restrictions on piggyback loans.
“The President’s action today will allow the SBA and small businesses the opportunity to get down to the business of financing growth and creating jobs for the U.S. economy,” said SBA Administrator Hector V. Barreto. “I believe we can expect another record-breaking year for the SBA’s flagship 7(a) loan program, and another historic year for America’s small businesses.”
The new law increases the 7(a) program’s lending authority for this year to $12.5 billion, allowing the program to reach up to 90,000 small businesses in fiscal year 2004, creating or retaining up to 500,000 jobs for hard-working Americans.
The legislation also allows the SBA to immediately remove the $750,000 cap on 7(a) loans, returning it to its previous $2 million level. The bill also raises the maximum on SBA Express loans to $2 million and allows the SBA to raise the maximum guaranty on loans up to $2 million to 75 percent. Piggyback loans will once again be allowed.
The legislation reauthorizes the 504 loan program and sets authorization levels for the Small Business Investment Company program through the end of the fiscal year. The bill also guarantees that the SBA’s Small Disadvantaged Business and Preferred Surety Bond programs will remain in continual service through the end of the June 4, 2004.