The U.S. Small Business Administration today announced that it's loosening eligibility for the most-popular line of loans it backs, making the cash available to auto dealers, car-parts suppliers and other businesses deemed too large for the credit lines in the past.
The expansion of the SBA's "7(a)" program starts next week and lasts until Sept. 30, 2010. The SBA states that 70,000 small business will be newly eligible for the loans.
"This is just one more step we are taking to make sure small businesses have access to capital to keep their doors open and employees working during these tough economic times," SBA chief Karen Mills stated. "We have seen signs that small businesses that are just outside the traditional 7(a) size standard are being shut out of the conventional lending market. This temporary change will help those businesses weather these tough times and help move our nation closer to economic recovery."
The new loan standards mean that companies with net worths of up to $8.5 million and net income of up to $3 million can apply for the SBA-backed credit lines. For more information visit the SBA's site and click on "What's New about Small Business Size Standards."