Good news in this post by Diana Ransom on Entrepreneur.com?
When the Small Business Administration's enhanced loan guarantee slipped back down to pre-recession levels in May of last year, small-business owners got nervous.
Provisions in the 2009 Recovery Act and four subsequent extensions had lifted the SBA guarantee on 7(a) loans to 90 percent and reduced borrower fees on most 7(a) and 504 loans. When the provisions expired, that guarantee went to 75 percent to 85 percent.
The question was: Without that enhanced guarantee, would small-business owners get the loans they needed if banks suddenly had to take on more risk?
So far it looks like the answer is yes. JP Morgan Chase yesterday announced that it would increase its commitment to lend $12 billion to U.S. small businesses in 2011 -- a 20 percent increase over 2010.
Although the nation's other two biggest banks, Bank of America and Wells Fargo, don't have a similar commitment to lend to small businesses, they say they're optimistic about keeping up a robust effort. Already, in the first quarter of 2011, Wells Fargo made $3.7 billion in new loan commitments to U.S. small businesses. This is a 27 percent increase over the first quarter of 2010, according to Marc Bernstein, head of Wells Fargo's Small Business Segment.
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