2009 American Recovery & Reinvestment Act SBA Update

1. 2009 American Recovery & Reinvestment Act SBA Update

2. Nationwide effort to: • create jobs • transform our economy • PLAN is to grow our economy: • by jumpstarting job creation • re-starting lending • investing in small businesses. • The Recovery Act: • comprehensive package of • tax breaks, • financial assistance • and market enhancements

3. $730 million • The SBA’s provision in the Bill • To Increase access to capital for small business • $375 million: • temporary fee reductions • increased SBA guarantee up to 90% • $255 millionARC Stabilization Loans • New SBA loan program to help small businesses meet existing debt payments • $30 million to expanding Micro loan program • enough to fund up to $50 million in new lending

4. NINE COMPONENTS OF BILL • Temporary Elimination of Loan Fees • INCREASE SBA Guarantees to 90% • 7(a) Secondary Market Liquidity • ARC Stabilization Loans • Expanded Microloans

5. NINE COMPONENTS OF BILL (cont.) 6. Surety Bond Program Expansion 7. Create a Secondary Market for 504 First Mortgages • Expanded 504 Refinancing Project • SBIC Program Expansion

6. Fee Reductions • Eliminates borrower fees on SBA’s 7(a) long term loans as well as both borrower and lender fees on the 504 Program • Fee elimination does not apply to loans with a maturity of less than 12 months. • Fees paid since February 17, 2009 will be refunded by SBA. Expected date is after May 1, 2009. • Lenders must reimburse fees paid by borrowers on eligible loans.

7. Maximum Guaranties • 90% guarantee on most SBA loans • SBAExpress in not included • Loans greater than $1,666,666 will only have a $1,500,000 guaranty. • These program improvements are only expected to last until the end of the year.

8. Maximum Guaranties Up to 90% Guaranty Loan ProgramMax. loanMax. guarantee $ FULL 90% Guaranty • Lender Advantage $ 350,000 $ 315,000 • Community Express $ 250,000 $ 225,000 • Patriot Express $ 500,000 $ 450,000 • Export Express $ 250,000 $ 225,000 • Gulf Opportunity $ 150,000 $ 135,000 90% Maximum Guaranty up to : • Standard 7(a) $ 2,000,000 $ 1,500,000 • CLP $ 2,000,000 $ 1,500,000 • PLP $ 2,000,000 $ 1,500,000

9. 7(a) Secondary Market Liquidity The Recovery Act allows SBA to reinvigorate the secondary markets for SBA loans. RESULTS: • Increase bank profitability • Encourage banks to make more small business loans • Increase greater access to credit for small business

10. ARC Stabilization Loans Brand New SBA Program to give small businesses some temporary financial relief to keep their doors open and get their cash flow back on track create new jobs. Loans up to $35,000 • Viable small businesses that need help making payments on an existing, qualifying loan for up to six months. SBA loans made before Feb. 17 not eligible • Deferred-payment • Repayment does not begin until 12 months after the loan is fully disbursed. • 100% guaranteed by the SBA

11. Expanded Microloans Increased funding to the SBA-backed MicroLoan Program • Micro-Loans can be up to $35,000 • Enough funding from SBA to generate • up to$50 million in new SBA-MicroLoans For a more information and a list of micro lenders go to www.sba.gov/va Look for The MicroLoan Program and Click on the nonprofit intermediaries link 11

12. “The Recovery Act”(cont.) • 6. Surety Bond Program Expansion  Increasing Surety Bond Limits will help small businesses compete for the billions of dollars • 7. Secondary Market for 504 SBA to establish a process for the private sector to apply for federal guaranty on pools of 1st lien 504 loans. • 8. Expanded 504 Refinancing Project to restructure and refinance existing loans into SBA-backed 504 loans. • 9. SBIC Program Expansion SBA working on regulations that they will required SBICs to invest 25 % of their financing dollars in “smaller” enterprises 12

13. HOW TO APPLY? SBA Guaranteed Loans are BANK LOANS Apply Directly to a participating SBA LENDER To find a lender go to www.sba.gov/va Click on the “financing” link And look for:Preferred, SBAExpress,…....Lenders To see who the active SBA lenders are: scroll to near the bottom of the finance page and look for KEY SBA LENDER WEBSITES &INFORMATION: Loan Volume by Lender:  FY 2009 YTD through Feb. 28;

14. HOW TO APPLY? Community Express Loan Program To find a lender go to www.sba.gov/va Click on the “financing” link And look for: The CommunityExpress Loan Program And click on the technical and management assistance link

15. Contracting Opportunities

18. SBA UPDATES • Change in GC Area office location • E-Verify • GAO decisions • eSRS • Rothe Decision • Recovery Act – Blanket Waivers • HUBZone & 8(a) Program Updates • Small Business program parity • Processing of 8(a) Offers

19. Questions? Thank you!