Expansion Technology Corporate

Small Business Administration (SBA) Administrator Karen Mills was in San Antonio Monday to discuss ways both the agency and the Obama administration are working on to further encourage lending to small businesses.

Mills spoke at the annual International Franchise Association convention.

These efforts, Mills says, include asking Congress for additional funding for its loan programs.

In February of 2009, the SBA received $730 million in federal stimulus funding as part of the American Recovery and Reinvestment Act. However, this wasn’t enough to meet the loan demand and in December, the SBA received an additional $125 million from Congress.

“We immediately were able to get that out as well. (But) it will run out at the end of this month,” Mills says, adding that the president has asked Congress for another extension in funding.

SBA spokesman Jonathan Swain says the president called for extending the recovery act provisions for the SBA’s 7a and 504 Certified Development Company loan programs through Sept. 30, 2010. The House passed legislation that would do so and it included $323 million to fund the extension. The U.S. Senate has not yet acted on the proposal.

“We are continuing to discuss it with the Senate and are hopeful we will see the extension move forward soon,” Swain says.

If granted, Mills says, the additional funds will be used to increase the loan limit for its 7(a) and 504 loan programs from $2 million to $5 million. Mills says about 10 percent or 12 percent of the loans made with recovery funds have gone to franchisees. Many of these franchisees, she says, have expressed the need for larger loan limits in order to purchase buildings or to make acquisitions.

“So, we’ve proposed to Congress that we increase these loans,” she says.

Other things the SBA is looking to do is extend the 90 percent guarantee on its 7(a) loan program.

The Recovery Act, among other things, temporarily raised the guarantee on the 7(a) loan program up to 90 percent through the end of the calendar year 2009, or until funds set aside for the program were exhausted.

Prior to the enactment of the law, the guarantee on the 7(a) loan program was between 75 percent and 85 percent.

The act also temporarily eliminated fees for borrowers on the 7(a) loans as well as fees for both borrowers and lenders on the 504 loans through the end of the year or until funding for the enhanced programs are exhausted.

The 504 CDC loans are principally used for land, new building construction, acquisition and rehab of existing buildings, long-term machinery and equipment purchases, and debt refinancing.

Interestingly, Mills says, the agency is also seeking to use its 504 loan program to refinance owner-occupied commercial real estate mortgages.

Mills says that in this present economic environment, in an effort to get commercial mortgages off their books, some banks may be unwilling to renew commercial real estate mortgages even if the owners have never missed a payment.

Using the 504 loan program in this capacity temporarily, she says, could benefit these business owners.

Mills says the agency has been meeting with small and large banks as well as small businesses and community leaders around the country to develop the measures that it is seeking from Congress. And, she says she believes these measures are ones that will be easy to implement.

“We can do those things quickly within the programmatic structure that we already have (in place) at very cost-effective rates,” she says.

On Wednesday 21 October, Commercialisation Australia (formerly known as the Commonwealth Commercialisation Institute) was announced to provide a radical new approach to commercialising promising Australian research and ideas. Commercialisation Australia will receive $196.1 million over the next 4 years, with ongoing funding of $82 million a year thereafter.

Commercialisation Australia will give successful applicants access to:

• specialist advice and services to build the skills, knowledge and linkages necessary to successfully commercialise their ideas. This includes funding of up to $50,000 to engage specialist services and, where it is deemed appropriate, up to $200,000 over two years to assist in the recruitment of experienced CEOs and executives;
• funding of up to $250,000 for proof of concept activities; and
• funding of up to $2 million for early stage commercialisation activities.

Successful applicants will be assigned a Case Manager for the duration of their involvement with Commercialisation Australia. The Case Manager will partner with the successful applicant, assessing its needs and monitoring their progress.

The Case Manager will be responsible for linking the successful applicant with a group of volunteer mentors – people with ‘hands-on’ experience in the various aspects of the commercialisation process.

Registration of Interest for Case Manager and Volunteer Mentor positions

Persons interested in being considered for the Case Manager or Volunteer Mentor positions are encouraged to register their interest with the Commercialisation Australia Team. Persons who register will receive information on the public recruitment process for Case Managers and for listing of Volunteer Mentors once these processes are underway