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504 Loan Limits Would Increase If Small Business Bill Passed

WASHINGTON - A bill that would expand several SBA's loan programs used by credit unions was recently introduced by Sen. Olympia Snowe (R-Maine). The Small Business Reauthorization and Manufacturing Assistance Act of 2004 (S. 2834) would increase the size of loans in the 504-loan guarantee program to $1.5 million up...

By Staff Writer | Updated on October 05, 2004

WASHINGTON – A bill that would expand several SBA’s loan programs used by credit unions was recently introduced by Sen. Olympia Snowe (R-Maine). The Small Business Reauthorization and Manufacturing Assistance Act of 2004 (S. 2834) would increase the size of loans in the 504-loan guarantee program to $1.5 million up from the current $1 million. Certain provisions, such as a business being located in a rural area, would increase the loan backing to $2 million, up from $1.3 million. If the loan is for a manufacturing project, the maximum would expand to $4 million, up from $1 million, according to Snowe. The bill would also increase current fees paid by borrowers under 7(a) loans. Otherwise, the fees would increase 40% to 100%, according to the Senate Committee on Small Business and Entrepreneurship, which is chaired by Snowe. The SBA’s Office of Advocacy said the bill places “new emphasis on compliance guides that agencies are required to write so that small businesses can better understand complex rules and regulations.” Office of Advocacy statistics show that it annually costs the smallest of businesses almost $7,000 per employee to comply with federal regulations. That cost places a “burden” on small businesses that is 60% greater than costs incurred by large corporations.

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