Official calls to expand loan stimulus programs

The Small Business Administration's top official told local businesspeople Tuesday that she wants SBA loan stimulus programs expanded because the recession continues to take a bite out of small business.

"There is more to do, and we're not out of the woods yet," SBA Administrator Karen Mills told attendees at a Las Vegas Chamber of Commerce luncheon at the Four Seasons. "I have been seeing an economy that is coming back for small business much more slowly than for big business."

"Small businesses, especially here in Nevada," she added, "are still struggling to create jobs and lead us to full recovery because they simply don't have access to capital."

Although SBA lending has surged nationally, SBA lending totals suggest Nevada remains stuck in an economic slump.

The number of standard SBA 7(a) loans in Nevada dropped to 158 for a total of $45.9 million for the period of Oct. 1 to May 19. That's about the same as the dollar total for 173 loans in the same period last year in Nevada.

Yet, the Nevada totals remain far below the 468 loans totaling $74.6 million from Oct. 1, 2007, through May 19, 2008, before the financial meltdown on Wall Street.

The number of SBA 504 loans, which are long-term, fixed-rate loans for equipment and owner-occupied real estate, has fallen to one-third of the level in the Oct. 1, 2007, to May 19, 2008, period. In addition, the total amount of 504 loans plunged to $42.4 million from $150.6 million in the period two years ago.

As an example of a recent loan, Mills mentioned a $175,000 SBA loan that Nevada State Bank made to Corporate Flight International, an air charter and aircraft maintenance company in Las Vegas. The company used the money to stabilize cash flow, increase marketing and hire three more employees, she said.

The administration wants to change the law so that 504 loans can be used to refinance owner-occupied, conventional commercial real estate loans that are coming due. Mills said she fears that banks will refuse to refinance some of these loans unless 504 loans are available.

To increase lending, the White House is asking for a $30 billion Small Business Lending Fund that will make money available to community banks at rates as low as 1 percent for small-business loans.

The SBA also wants the maximum size of SBA loans increased.

The federal agency is urging Congress to resume programs that increase government guarantees on SBA loans and eliminate or reduce fees.

Contact reporter John G. Edwards at
jedwards@reviewjournal.com or 702-383-0420.