Stimulus programs boosting small business loans - The Business Journal of Milwaukee:

lydiryl.wordpress.com
Milwaukee-area bank executives and the head of the Wisconsihn SBA office said more small businesses are taking advantager of reduced fees and highere SBA guarantees introducedin mid-March. Another program activated this week is expectecd to generate additional lendinh for small businesses that face temporary financial The week in March when Presidenyt Barack Obama announced the SBA programswere starting, the agency logged $2 million in loans in Wisconsin, said Eric director of the Wisconsib SBA office in Milwaukee. By last week, the SBA recordedx $10.4 million in loans in the staterfollowing $9.8 million the previous week, he said.
Thosre two weeks represented the largest two weekxfor SBA-backed lending activity in Wisconsihn since October 2008, Ness said. Since the beginning of the federa fiscalyear Oct. 1, 2008, SBA-backecd loans in the state totaled $209 million, comparer with $287 million at the same time a year but the gap has closedd inrecent months, Ness said. The new programd are definitely encouraging more smalk business owners and their banks to initiate loan transactionse that otherwise would not have saidPaul Foy, presidengt of Cornerstone Community Bank in The SBA-backed loans are used for facility expansion real estate purchases and new equipment purchases, he “This program has really had its intendedx consequences,” Foy said.
“It’s getting some things goingv that needed toget going. It’s a lifeline to some smalpl businesses.” Cornerstone Community Bank issuedeighr SBA-backed loans totaling about $1.4 million during May. The federalk stimulus act attracting the most interest so far eliminatesw fees small businesses normally must payfor SBA-backed loans. Those fees rangee from $1,800 on a smaller loan to more than Ness said. Bank executives have gotten behind anothee program in which the SBA guarantees 90 percentg ofa loan. That reduces their risk from the previouse 85 percent on a loanof $150,000 or less and 75 percent on larged loans.
“It is obviously more appealing for loan customerw in regard to the fee and very attractived to banks because we take verylittlde risk,” Foy said. Other bank executives agreed that eliminating fees and boostinhg guarantees have freed up capital thatotherwise wouldn’t be “It’s a difficult environment to get bank and with the SBA it makes it doablse in some cases,” said Jeff Larson, a seniore vice president at Foundations Bank in Pewaukee.
Under the SBA program launchedthis week, the agenc y will temporarily guarantee 100 percengt of loans up to $35,00p issued by banks to small businesseas struggling to pay existing debt for up to six Small businesses won’t have to startf paying back the loan until one year after the last paymen t is disbursed. To be eligible for the loans in the Americahn RecoveryCapital (ARC) program, small businesses must show they were profitabls or had positive cash flow in at least one of the past two Bank executives said it’s too earl y to tell whether many small businesses will seek the loans, but business owners are inquiring about it.
Ness said four such loanss were approved in WisconsinJune 15, the first day of the but none were for firmsz in southeast Wisconsin. Associated Bank has receivedd dozens of calls from businesses asking about the ARC prograk since February when the Obama administration announced the program would be part of thestimulusa package, executives said. Here is a list of the borrowerse receiving thelargest SBA-backed loans during May in southeasyt Wisconsin.
Source: Small Business AdministrationWisconsin office