Supplier Information

The Recovery Act is Working

By Michael Elkin, Assistant District Director, U.S. Small Business Administration, San Francisco, CA

More than 100 days ago, President Obama signed the American Recovery and Reinvestment Act, also known as the Recovery Act.  In that time, the U.S. Small Business Administration (SBA) has implemented new programs to get credit flowing again. At the SBA, we have several more upcoming programs that will help small businesses weather this economic storm, and ultimately continue to grow and create jobs.  

First, we enhanced our top two loan programs - 7(a) and 504 - which have, so far, resulted in $4.3 billion in new loans for small businesses.  We temporarily eliminated fees for borrowers on our 7(a) loans, and for both borrowers and lenders on our 504 loans. 

Improved Loan Guarantees and Volume
In addition, we temporarily raised the guarantee on most of our 7(a) loans to as much as 90 percent, up from 75–85 percent.  In this short time, there has been a 30 percent increase in average weekly loan dollar volume, compared to the weekly average before the passage of the Recovery Act.

In San Rafael, California, Linda Russell, owner of Mugshots School of Photography, received a $300,000 7(a) SBA loan through the Recovery Act.  She plans to use the money to increase marketing for her business and expand its online presence.  The waiver of guaranty fees by the Recovery Act saved her over US$8,000, which she is putting back into her business.

A Bridge for Small Businesses
This week, we launched the America’s Recovery Capital (ARC) loan program. ARC loans will provide a bridge for many small businesses to the better economic times to come.  This program provides loans of up to US$35,000 to viable, but struggling, small businesses to help them make debt payments. 

ARC loans are deferred repayment loans, which are interest free to the borrower, and 100 percent guaranteed by the SBA, which makes the interest payments to the bank.  You can learn more about these programs at our website www.sba.gov.

Additional Program Information
In addition to the loan programs, the U.S. government has expanded procurement opportunities for small businesses:

• To learn more about the contracting opportunities available to small businesses, go to the Recovery website.

• At the General Services Agency small businesses can learn about the contracts and subcontracts available to repair and upgrade U.S. government buildings and facilities. 

• On our website we have resources for small businesses to learn the basics of government contracting. There, you will find contacts for small business representatives at U.S. government agencies, as well as prime contractors and sources of subcontracting opportunities.

• It is good to remember that much of the Recovery Act funds will actually be managed by state and local agencies. For example, in California, Federal Highway Administration funds will be managed by the California Department of Transportation California Department of Transportation.

• Bidsync is another good resource for learning about contract and business opportunities from local government agencies, including cities and counties.

Small businesses are the key to our nation’s economic recovery. At the SBA, we are using every tool in our toolbox  - and creating new ones when necessary - to help small businesses lead us out of these tough economic times.