The new Small Business Jobs Act, signed by President Obama on September 27, changes many of the rules previously stalling the ability of small businesses and U.S. exporters from acquiring loans for growth and new programs, according to an article recently released by the U.S. Commerce Dept.
One of those changes can possibly help the future of several thousand businesses that didn’t before qualify for loan programs through the Small Business Administration (SBA), which previously qualified businesses using NAIC codes and gross revenue or number of employees. Effective immediately, a temporary size standard change determines the size of a company using the maximize tangible net worth of the applicant, which cannot be more than $15 million to qualify as a small business; and the average net income after Federal income tax for the prior two years, which cannot exceed $5 million to qualify as a small business, according to the U.S. Commerce Dept. article.
For exporters, the Act raises the amount of allowable SBA Export Express loans to $500,000 from $250,000. These loans can be used for “market development expenses, such as foreign trade show participation, translation services, and travel; export transaction costs and other working capital needs; or equipment, fixed assets, and real estate. Some proceeds can be used for domestic operations.” However, to qualify the business must prove that it has been in business for at least one year and the loan will aid it in entering a new export market or expanding in an existing export market.
Further, companies seeking an SBA International Trade loan to grow export sales or that have suffered from the recent economy and need funds to become more competitive can now apply for loans up to $5 million with a full 90 percent guaranty. These loans can be used for a building, equipment and/or working capital.
For more information, visit the SBA website at www.sba.gov/smallbusinessplanner/start/financestartup.html and the U.S. Commerce Dept. at www.commerce.gov/.
Sources: U.S. Department of Commerce, U.S. Small Business Administration