The Small Business Administration has resumed guaranteeing 90 percent of loans made through its flagship 7(a) program.
The incentive was created to help SBA lending rebound after it cratered during the financial crisis of 2008.
The 90 percent guarantee, up from the typical 75 percent, was first funded by the economic stimulus bill, which also enabled the SBA to waive some of its fees on its 7(a) and 504 loans.
These enhancements expired at the end of May but were renewed through the end of December by the Small Business Jobs Act, which was signed into law Sept. 27.
The higher guarantee makes SBA loans less risky for lenders and the fee waivers made them more affordable for borrowers. As a result, SBA lending continued to grow in fiscal 2010, which ended Sept. 30.
Lending through the 7(a) and 504 programs totaled more than $22 billion in fiscal 2010, up from more than $17 billion in fiscal 2009. Nearly 55,000 small businesses received loans through these programs in fiscal 2010.