Both houses of Congress passed legislation last week to increase the spending authority of the Small Business Administration (SBA) to $18.5 billion for the 2015 fiscal year, up from the originally established $17.5 billion. The bill, which was approved by President Obama on Friday, will specifically increase 7(a) loans, which are the most common, providing financial assistance to small businesses with special requirements.
According to The Business Journals, 7(a) loans have been growing steadily since 2011. These loans totaled $17.3 billion in the fiscal year that will come to a close at the end of September, up from $15.6 billion in FY 2013. In 2010, Congress raised the maximum limit of SBA loans from $2 million to $5 million, which has had a noticeable effect on the increase in total volume — large loans totaled $5.1 billion in 2014.
Another bill was introduced more recently that would simplify the application process by expanding the use of electronic records and e-signatures. "A lengthy and complicated loan application process is often a great impediment for many small businesses to secure the capital they need to get their products or services to market," said Representative Sam Graves, chairman of the House Committee on Small Business, to The Ripon Advance. "This [legislation] will likely cut the application process by an average of two to three days."
Both of these measures are good news for small business owners, who should find it easier to apply for and obtain loans. Commercial loan software can help lending institutions determine ideal installments and terms when considering a small business loan. This tool allows lenders to set amortization schedules, ensuring automated, on-time payments and reducing the risk of default.