What this extension does is allows for higher guarantee levels on SBA 7(a) loans to 90%. It also waives borrower fees on most 7(a) and 504 loans. Presumably, this encourages banks to make more loans in borderline cases, and makes the cost of borrowing less expensive for small businesses.
President Obama has urged extending the ARRA loan adjustments until September 2010. While that hasn’t happened yet, on March 26, 2010, the president signed an extension that will continue their extension through April 30, 2010. The SBA estimates the $40 million extension will make about $1.4 billion in new small-business lending possible.
This issue has long been discussed and it seems that until now it is not yet resolved. Well, I just hope there would be something much more realistic than this program.