The Small Business Administration (SBA) has announced that government stimulus funds for two of its most popular lending programs has run out. No stimulus means fewer new SBA loans. This is not good news for small businesses who apply for SBA loans. This could leave a lot of struggling small businesses out in the cold this winter.
Reuters reports that loan volumes for small businesses could fall if the stimulus money is not replenished. $375 million has already been used to pump up the SBA's popular 7(a) and 504 lending programs.
The money was being used to aid in reducing fees on SBA backed loans and also guarantee the loans from 75%-90%. The money was able to save small businesses up to $60,000 in fees. It also served to tempt other lenders to grant credit to the small businesses as well as convince investors to invest in the securities market.