LANSING – President Bush signed legislation making more than $21 billion, some $5 billion more than last year, for two small businesses loan programs administered through the SBA. The legislation also provides the SBA with a $580 million budget for fiscal year 2005.

The SBA?s flagship 7(a) loan guarantee program was boosted to a $16 billion level, $3.5 billion above what the program provided last fiscal year, when a record $12.55 billion in financing was made to small business. Additionally, the government loan guarantee increased from $1 million to $1.5 million and the program will now operate without a congressional appropriation or at zero subsidies, meaning that the program will be self-supported through modest fees paid by lenders and borrowers.

An additional enhancement to the 7(a) program was Congress? action to make the popular SBAExpress program permanent, raising the maximum loan size to $350,000 with a 50 percent government guarantee.

Congressional action included expanding the agency?s 504 loan program up to the $5 billion level, and raising the maximum loan size for manufacturers to $4 million. The 504 loans may be used for the purchase of real estate, buildings and machinery.

Other highlights in the bill include $3.250 billion for SBIC debenture financing and funding for the microloan and HUBZone programs. The SBA?s disaster program, instrumental in the assistance provided after the rash of hurricanes this past summer, previously received supplemental funding.

In the area of entrepreneurial development, the Small Business Development, SCORE and Women?s Business Centers were reauthorized and funded at the same levels as last year. The bill also provides funding for the veterans and Native Americans programs.

?The SBA had a record breaking year in the number of loans and technical assistance it provided to entrepreneurs last year and we?re poised to do even better this year, particularly in our loan programs,? Administrator Barreto said. ?Under President Bush?s leadership, we will continue to move in a direction of more efficient and effective delivery of our products and services. In the long term this is good for the American taxpayer and for small businesses.?

This article was provided by the Small Business Association of Michigan. To learn more about SBAM, click on SBAM.Org