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March 3, 2010 Senate Passes Extension of Small Business Loan Guarantee Program Through March 28 -- Appropriates Additional $60 Million |
| U.S. Senate Committee on Small Business and Entrepreneurship Chair Mary L. Landrieu, D-La., praised the Senate's temporary extension of two important provisions enacted in the American Recovery and Reinvestment Act: increased government guarantees and eliminated fees on small business loans. The programs were extended for 30 days."The bill passed tonight by the Senate will extend access to health care benefits for workers who have lost their jobs, help small businesses get loans so they can grow and hire, and extend unemployment insurance benefits for millions of Americans who are looking for work," Obama said. "I'm grateful to the members of the Senate on both sides of the aisle who worked to end this roadblock to relief for America's working families," the statement said. |
SBA News Release
PRESS OFFICE
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SBA Proposes Women-Owned Small Business Rule To
Expand Access to Federal Contracting Opportunities
Contact: Hayley Matz (202) 205-6948
Release Number: 10-05
Internet Address: http://www.sba.gov/news
WASHINGTON – The U.S. Small Business Administration today released a proposed rule aimed at expanding federal contracting opportunities for women- owned small businesses (WOSB). The proposed rule is available for public comment for 60 days.
The proposed rule is part of the Obama Administration’s overall commitment to expanding opportunities for small businesses to compete for federal contracts, in particular those owned by women, minorities and veterans. This proposed rule identifies 83 industries in which WOSBs are under-represented or substantially under-represented in the federal contract marketplace. This rule is aimed at providing greater opportunities for WOSBs to compete for federal contracts, while achieving the existing statutory goal that 5 percent of federal contracting dollars go to women-owned small businesses.
“Women-owned small businesses are one of the fastest growing segments of our economy, yet they continue to be under-represented when it comes to federal contracting,” said SBA Administrator Karen Mills. “Across the country, women are leading strong, innovative companies, and we know that securing federal contracts can be the opportunity that helps them take their businesses to the next level, expand their volume and create good-paying jobs. This proposed rule is a step forward in helping ensure greater access for women- owned small businesses in the federal marketplace.”
The creation of a rule to increase federal contracting opportunities for WOSBs was authorized by Congress in 2000. Since that time, SBA took a number of steps to study and analyze the market, including looking at participation by women-owned small businesses across all industries. Various draft rules were made available for public comment in prior years, but the Obama Administration chose last year to draft a new, comprehensive rule, based on the analysis of the prior studies and on all the questions and comments previously received.
Some of the components of the proposed Women-Owned Small Business rule include:
• To be eligible, a firm must be 51 percent owned and controlled by one or more women, and primarily managed by one or more women. The women must be U.S. citizens. The firm must be “small” in its primary industry in accordance with SBA’s size standards for that industry. In order for a WOSB to be deemed “economically disadvantaged,” its owners must demonstrate economic disadvantage in accordance with the requirements set forth in the proposed rule.
• Based upon the analysis in a study commissioned by the SBA from the Kauffman-RAND Foundation, the proposed rule identifies 83 industries (identified by “NAICS” codes) in which women-owned small businesses are under-represented or substantially under-represented.
o The SBA has identified eligible industries based upon the combination of both the “share of contracting dollars” analysis, as well as the “share of number of contracts awarded” analysis used in the RAND study. This differs from an earlier proposed version of the rule which identified only four industries in which women-owned small businesses were under-represented. This earlier version proposed to identify eligible industries based solely on the “share of contracting dollars” analysis used in the RAND study.
• In accordance with the statute, the proposed rule authorizes a set-aside of federal contracts for WOSBs where the anticipated contract price does not exceed $5 million in the case of manufacturing contracts and $3 million in the case of other contracts. Contracts with values in excess of these limits are not subject to set-aside under this program.
• The proposed rule removes the requirement, set forth in a prior proposed version, that each federal agency certify that it had engaged in discrimination against women-owned small businesses in order for the program to apply to contracting by that agency.
• The proposed rule allows women-owned small businesses to self-certify as “WOSBs” or to be certified by third-party certifiers, including government entities and private certification groups.
o The proposed rule requires WOSBs which self-certify to submit a robust certification at the federal ORCA Web site and also to submit a core set of eligibility-related documents to an online “document repository” to be maintained by the SBA. Each agency’s contracting officers will have full access to this repository.
o The SBA intends to engage in a significant number of program examinations to confirm eligibility of individual WOSBs.
o In the event of a contract protest or program review, the SBA will be entitled to request substantial additional documentation from the WOSB to establish eligibility.
o SBA intends vigorously to pursue ineligible firms which seek to take advantage of this program and in so doing to deny its benefits to the intended legitimate WOSBs.
NOTE (KP): An earlier study below listed 31 SIC codes as underrepresented (the new study will expand these to 83):
Using the non-public SBO data for the availability component of the disparity ratio and the FY05 FPDS/NG data from RAND study results for the utilization component, thirty-one of the 140 NAICS codes analyzed in the RAND study were identified as underrepresented or substantially underrepresented:
2361 -- Residential Building Construction,
3149 -- Other Textile Product Mills,
3152 - Cut and Sew Apparel Manufacturing,
3231 -- Printing and Related Support Activities,
3259 -- Other Chemical Product and Preparation Manufacturing,
3323 -- Architectural and Structural Metals Manufacturing,
3324 -- Boiler, Tank and Shipping Container Manufacturing,
3328 --Coating, Engraving, Heat Treating, and Allied Activities,
3369 -- Other Transportation Equipment Manufacturing,
3371 -- Household and Institutional Furniture and Kitchen Cabinet Manufacturing,
4412 -- Other Motor Vehicle Dealers,
4461 -- Health and Personal Care Stores;
4543 -- Direct Selling Establishments,
4841 -- General Freight Trucking,
4931 -- Warehousing and Storage,
5179 -- Other Telecommunications,
5312 --Offices of Real Estate Agents and Brokers,
5413 -- Architectural, Engineering, and Related Services;
5414 -- Specialized Design Services,
5417 -- Scientific Research and Development Services,
5419 -- Other Professional, Scientific, and Technical Services,
5614 - Business Support Services,
5615 -- Travel Arrangement and Reservation Services,
5619 -- Other Support Services;
5622 - Waste Treatment and Disposal,
5629 --Remediation and Other Waste Management Services,
6114 -- Business Schools and Computer and Management Training,
6115 -- Technical and Trade Schools,
6116 --Other Schools and Instruction;
6214 - Outpatient Care Centers,
8112 -- Electronic and Precision Equipment Repair and Maintenance,
8129 -- Other Personal Services.
SBA News Release PRESS OFFICE
Statement from Administrator Mills on Continuing Support For Small Businesses through SBA Recovery Programs
Release Date: February 19, 2010
Internet Address:
http://www.sba.gov/newsWASHINGTON
– SBA issued the following statement today from Administrator Karen Mills regarding efforts to ensure continued funding for two key provisions in the American Reinvestment and Recovery Act (ARRA) of 2009:"SBA’s most popular ARRA provisions - the increased guarantee and reduced fees in the two largest lending programs - have helped engineer a significant turnaround in SBA lending. Continuing those ARRA provisions is SBA’s top priority. Through the original $375 million and the additional $125 million appropriations for these two provisions, SBA has supported more than $20 billion in lending to small businesses across the country and seen its average weekly loan volume increase by nearly 90 percent since February 2009.
Through ARRA we brought nearly 1,100 lending institutions back to the SBA’s programs that had not made an SBA loan since at least 2007. All told, these steps have benefitted tens of thousands of small businesses and supported hundreds of thousands of jobs during these tough economic times. However, we know there is still more work to be done. As the President has requested, we will continue to work with Congress to extend these programs through September 2010.
"The additional $125 million appropriation approved in December to extend SBA’s 7(a) loan guarantee to 90 percent and reduce or eliminate borrower fees on both the 7(a) and 504 loans will be used faster than expected. Loan volume has surged since earlier this week when an Information Notice was released to lenders. SBA communicated with its lending partners today that it will re-activate the Recovery Loan Queue no later than Monday, Feb. 22. The Queue is an efficient and transparent process that will ensure that every remaining dollar possible is made available to help small businesses drive economic recovery across the country.
"The SBA advocates for small businesses across the federal government and will continue its efforts to keep America’s small businesses on a path to recovery and long-term success. Small businesses are a central piece of President Obama’s Jobs Plan because they have been and will continue to be a key engine for job creation across the country. With that in mind, President Obama laid out an aggressive agenda for providing small businesses with the support they need to create jobs and drive economic recovery. That agenda includes proposals in three key areas: expanding access to capital; providing tax incentives to encourage job creation; and maximizing the potential of innovative, high-growth companies."
SBA’s ARRA Programs:
SBA received $730 million in ARRA to support economic recovery programs for small businesses. Included in the appropriation was $375 million to support raising the government guarantee to 90 percent on SBA’s 7(a) loans and reducing some lender and borrower fees on its 7(a) and 504 loans, the agency’s two largest lending programs. The funds for these popular provisions ran out in November 2009. SBA received an additional $125 million appropriation in December 2009 along with authority to continue both of the programs through February.
SBA’s 7(a) and 504 ARRA Transition Plan:
SBA is in the process of finalizing the plan for transitioning its 7(a) and 504 programs back to their pre-ARRA terms and communicating those plans with its lending partners. This plan, when implemented, will include re-activating the Recovery Loan Queues no later than Monday, Feb. 22, 2010. The Queues will operate in the same manner as when originally implemented in November 2009. Sometimes previously approved loans are later cancelled or never disbursed for a variety of reasons.
The Queues take this into account and beginning on the transition date will allow eligible small businesses, in consultation with their lenders, to choose to be placed in the queue for possible approval for an ARRA loan if funding becomes available. Small business owners and lenders will have transparent access to the queue via
www.sba.gov/recoveryq and will be able to remove themselves from the queue at any time to be considered for a non-ARRA SBA loan with all applicable fees and, for 7(a) loans, standard guaranty levels.The authorization for the 90 percent guarantee on 7(a) loans ends Feb. 28, 2010, though funds may be exhausted sooner. Furthermore, applications in the Queues after Feb. 28, 2010 will only be eligible for decreased or eliminated borrower fees when funds become available.
To learn more about SBA’s ARRA programs and other resources for small businesses, please visit
www.sba.gov.
Banks pull another $1 billion from small business lending
NEW YORK (CNNMoney.com) -- The nation's biggest banks cut their collective small business lending balance by another $1 billion in November, according to a Treasury report released late Friday. The drop marked the seventh straight month of declines.
The 22 banks that got the most help from the Treasury's bailout programs have cut their small business loan balances $12.5 billion since April, when the Treasury began requiring them to file monthly reports on the tally. The banks' total lending has fallen 4.6% in that seven-month period, to $256.8 billion.
SBA Special Higher Guarantee and Waived Fees Extended to Feb. 28, 2010
On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (the “Recovery Act”) (P.L. 111-5). On March 16, 2009, SBA implemented sections 501 and 502 of the Recovery Act, which provide fee relief on 7(a) and 504 loans and an increased guaranty percentage on 7(a) loans. Both initiatives have contributed to a significant resurgence in lending to small businesses by SBA’s participating lenders and Certified Development Companies (CDCs).
Fed: "Risks to U.S. economy have eased considerably"
W
ASHINGTON (Reuters) - Federal Reserve policymakers last month believed risks to the U.S. economy had eased "considerably" and discussed stretching out a program that has held down home loan rates.
The Fed expressed confidence the deepest U.S. downturn since the 1930s was ending but also worried about weak growth ahead, according to minutes of its August 11-12 policy session released on Wednesday.
The U.S. central bank decided neither to expand nor contract its economy-supporting purchases of assets. "Meeting participants agreed that the incoming data and anecdotal evidence had strengthened their confidence that the downturn in economic activity was ending and that growth was likely to resume in the second half of the year," the minutes said.
Still, with the economy poised for a modest recovery at best, officials determined that low interest rates would be needed for an extended period.
"The (Fed) is in no hurry to alter its current policy stance," Paul Dales, an economist for Capital Economics in Toronto, said in a note to clients. "The Fed will complete its asset-purchasing program and remains reluctant to withdraw its policy support soon."
When it concluded its August meeting, the Fed had said the economy was showing signs of leveling out two years after the onset of the most virulent financial crisis in decades.
At the meeting, the central bank decided to keep benchmark overnight interest rates steady near zero and moved to phase out one of its emergency measures -- its $300 billion long-term Treasury buying program. It decided to let that program run several weeks longer than the original mid-September ending date to smooth the transition in markets.
The minutes showed that policymakers considered similarly stretching out and tapering off purchases of up to $1.25 trillion in mortgage-backed securities and up to $200 billion in mortgage agency debt, but made no decision. That program, which the Fed launched to drive down mortgage costs, is set to expire at the end of the year.
The Fed's purchases of MBS have already slowed, and market participants were widely expecting the central bank to stretch the program into next year to wean the market from its support.
So far this year, it has bought $792 billion in MBS and $118.6 billion in mortgage agency debt.
Policymakers also discussed adding adjustable rate mortgages to fixed-rate mortgages in its MBS buying program to cut costs for some borrowers, but made no decision.
Officials continued to worry the economy remained vulnerable to adverse shocks. The Fed officials had "particular concern" about weak labor markets and worried that sluggish income growth would hold back consumer spending, the minutes said. One big unknown was the degree to which households had turned more into savers than spenders.
The minutes showed officials also wrestling with the question of whether the unusually low level of interest rates and billions of dollars they had pumped into the economy could eventually spark inflation.
