What Is Small Business Start Up Loans And How Have They Benefitted From The Stimulus Bill?

Benefit from the Stimulus Bill

American Recovery and Reinvestment Act of 2009 (the Obama stimulus bill) has a little know about provision that increases spending the availability of Small Business Administration (SBA) loans. Essentially it creates a secondary loan and market that creates Guaranteed SBA Loans. What this means to all you small business owners out their, the government is loosening up rules and changing requirement so that lenders will start loaning money again.

Strangely enough the liberal U.S. Congress failed to make many SBA Loan programs permanent, and they didn't remove the 10% cap on the number of loans. So with the Obama stimulus bil it affects these programs in a positive way, continues them and allows small business lending as a whole.

Some undiscerning headlines claim $3 billion in the stimulus bill is being pumped into the secondary market and viola, the banks will be making more loans. Not so fast. As this article explains, that money is being pumped into an elite SBA program that will not affect the average small business owner.

Please remember that these aren't loans straight from the government to the small business owner. Basically its a provision that allows lenders to be able to more freely give small business owners money (which the Obama Administration feels will restart the economy).

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