The American Recovery and Reinvestment Act which was also recently pass has guaranteed $9 billion for new small business loans. However the new legislation will help improve the Small Business Administration’s program  allowing $44 billion a year for lending and investments for new and small businesses. 

The bill has many options for small business owners who didn’t get a bail out, according to Nydia Velázquez, chairman of the  House Small Business Committee. “Small businesses with tight profit margins don’t have the luxury of simply ‘tightening the belt.’ When money is short, they’re often forced to lay off workers. But with unemployment at 9.8 percent, we just can’t afford more losses. That’s why this bill delivers critical capital to new ventures.”

If the Act is passed through the Senate, loan maximums for small businesses would increase to $3 million for 7(a) loans, which covers most start-up business and existing small business.   A 504 loan, which is geared more towards larger businesses, in manufacturing or construction companies for example, that need to purchase real estate, machinery or to build brick-and-mortar facilities for expansion or modernization will go up to $25 million which is up dramatically from the previous $1.5 million offered.  The Act also encourages small local banks to reach out to small businesses and increases available loan sizes.

Rep. Anna G. Eshoo (D-California), voted in favor of the new bill, “As we work to emerge from this recession, it is essential that we support our small businesses, the backbone of our country’s jobs and economy, and its greatest source of innovation.  This legislation will give these businesses the lending they require to thrive.”

The bill still needs to be approved by the Senate, however, on the downside there is no estimated time for when the money will reach small business owners.