Every January, millions of people start the New Year with ideas and hopes. For business owners, the New Year is a great time to evaluate and identify what changes can improve business operations, with the hope of increasing sales and hiring more employees.
The U.S. Small Business Administration understands that operating a small business, even in good economic times, is not easy. Although the credit situation has improved from 2008, it has had a major impact on small businesses.
President Obama and Congress knew that getting small businesses capital would boost the economy, so they passed the American Recovery and Reinvestment Act and the Small Business Jobs Act to provide temporary higher government guarantees and permanently increased loan limits on SBA-backed loans. These measures got capital flowing again. The SBA reported record-breaking loan approvals supporting 60,000 loans for $30 billion in fiscal 2011.
Last year, the SBA asked more than 150 community lenders in all 50 states to identify ways the SBA’s CAPLines Program could work more effectively. CAPlines loans meet short-term and cyclical working capital needs with up to an 85 percent loan guarantee in four areas: seasonal lines of credit; contract loans; builders lines and working capital lines.
These changes have come about:
- Small businesses can now pledge accounts receivable, inventory, contracts and purchase orders to secure an SBA revolving line of credit.
- Small-business subcontractors can now get a line of credit to finance work on a contract with a federal prime contractor.
- The SBA no longer requires small-business owners without buildings or equipment to use their personal assets as collateral.
- Small businesses working on a contract that requires surety bonding can now get a line of credit.
CAPLines Program users also will benefit from the increased loan limit of $5 million, instituted as a result of the Jobs Act.
As you set your business goals this year, consider the SBA and its other resources: SCORE, Small Business Development Centers and Women’s Business Centers at SBA.gov/localresources
.—Patricia Brown-Dixon, Region 7 Administrator of the U.S. Small Business Administration