New
Intermediaries Will Provide Greater Access to Capital for Entrepreneurs
WASHINGTON
– With the American Recovery and Reinvestment Act funding an additional $50
million for loans and $24 million for technical assistance, the U.S. Small Business
Administration is expanding its Microloan program and increasing access to capital
for small businesses across the country.
The
program is shifting to funding provided under the Recovery Act now that it has
exhausted the regular FY 2009 appropriations for $20 million in loans and $20
million in technical assistance.
With the
additional resources, SBA is focused on adding new lenders and encouraging entrepreneurs
to seek out SBA-backed microlenders to finance their businesses.
“SBA’s
Microloan program provides a critical source of capital for entrepreneurs, including
women, low-income individuals and minorities, who often have difficulty obtaining
capital to start and grow their businesses,” said SBA Administrator Karen
G. Mills. “With these resources, we can put more entrepreneurs and small
business owners in a position to succeed and create jobs that will in turn help
drive our nation’s economic recovery.”
Since
the Recovery Act, SBA has approved eight new applications from lenders to join
the Microloan program, and has 15 new loans to microlenders for $10.7 million
in Recovery Act funds ready to be disbursed. Of the 15, eight are for new microlenders.
The
approved new microlenders are: Vermont Community Loan Fund, Inc. of Montpellier,
Vt; Neighborhood Development Center of Saint Paul, Minn.; Cen-Tex Certified Development
Corp. of Austin, Texas; The Emperor Organization of Tallahassee, Fla.; Staunton
Creative Community Fund, Inc. of Staunton, Va.; Lane MicroBusiness (d.b.a. eDev)
of Eugene, Oregon; FINANTA (American Street Financial Ser.) of Philadelphia, Pa;
and Accion USA, Inc. of New York, N.Y.
SBA’s
Microloan Program supports microlenders by providing them with up to $3.5 million
in low-cost loans from SBA to finance their lending to small businesses. SBA’s
interest rate to microlenders is based on the five-year Treasury rate, with adjustments
tied to a microlender’s average loan size.
Microlenders
use the SBA funding to provide loans of up to $35,000 to entrepreneurs, which
can be used for working capital and acquisition of materials, supplies, furniture,
fixtures and equipment.
SBA also provides
grant funding to microlenders to finance technical assistance and counseling programs
for their borrowers, including staff, classroom training and occupancy costs.
SBA’s reimbursement is capped at 25 percent of the microlender’s outstanding
SBA loan portfolio.
Organizations interested
in becoming SBA microlenders must meet specific criteria in terms of organizational
status, microlending experience and matching requirements from non-federal sources.
For more information, please visit: www.sba.gov/services/financialassistance/sbapartners/microloan,
email microloans@sba.gov,
or call 202-205-6485.
Entrepreneurs who wish
to learn about the Microloan program can visit: http://www.sba.gov/services/financialassistance/sbaloantopics/microloans/index.html.
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can receive all of the SBA’s News Releases via email. To subscribe, visit
http://web.sba.gov/list
and select “Press Office
