Two weeks ago I wrote that the SBA was going to loosen up loan money for small businesses. The next week a BBB bulletin warned, "If you're thinking about an SBA loan, do it now." Reportedly SBA lending banks are making loans, but may cut back sharply in the months ahead. Most banks are already miserly with loans to small business.
The Federal Reserve's latest survey of loan officers at large banks found that some are loosening standards on loans to large and medium sized business, but there's no change in credit standards for small business. New business entrepreneurs are out of luck right now unless the principals can pledge personal assets to cover the loan or come up with their own financing.
This is interesting, too! According to the BBB report, "Small businesses are running out of time to take advantage of an SBA program that allows owners of owner occupied real estate to use 504 loans to refinance their mortgages. That program, which allows business owners to get much lower interest rates on their mortgages, is scheduled to end on September 30."
Since more than half of all carpet cleaning operations are home based, refinancing a mortgage at a lower rate could be a big benefit to many in this business. It's a shame the program wasn't widely publicized until it was ready to end. Maybe the announcement was just designed to be used as political campaign rhetoric. How sad!
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