April 1, 2014
Access to two major government-guaranteed loan programs for small business will be improved this month, the S.C. district office of the Small Business Administration says.
Revised rules for the 7(a) and 504 loan programs are aimed at expanding eligibility, making it easier for small businesses to secure SBA-backed financing, and encouraging job creation, the agency said. The revisions will go into effect April 21.
Some of the changes include:
- Elimination of the personal resource test which benefits borrowers by adding flexibility in the management of their allocation of personal resources to the small business.
- Elimination of the nine-month rule for 504 eligible project expenses which allows businesses a longer timeframe in which to organize and initiate their small business project.
- Revised 504 loan program collateral requirements to allow third party lender to take collateral in addition to project collateral under certain conditions.
- Enhanced CDC (certified development company) corporate governance requirements to ensure more board accountability and to reduce risks to the SBA portfolio.
For the full text of rules published in the Federal Register, click here.