As of next week, more small businesses will be eligible for Small Business Administration-backed loans. Such financial help is the result of the SBA’s temporary change in the standard size of its 7(a) loan program that will allow businesses to qualify based on net worth and average income and will be in effect until September 30, 2010. The criteria is that a company (and its affiliates) net worth can’t be more than $8.5 million while its average net income after federal income taxes (excluding any carry-over losses) for the preceding two completed fiscal years can’t exceed $3 million.
“This is just one more step we are taking to make sure small businesses have access to capital to keep their doors open and employees working during these tough economic times,” says SBA Administrator Karen Mills. “We have seen signs that small businesses that are just outside the traditional 7(a) size standard are being shut out of the conventional lending market. This temporary change will help those businesses weather these tough times and help move our nation closer to economic recovery.”