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Should I ask that my loan application be submitted as a Recovery Act loan?

Guest post by: Joe Ferriolo

Article Overview: There are several important factors that a small business applicant, lender or CDC should consider when deciding whether to submit a new loan application as a Recovery Act loan that, if conditionally approved will be placed in the SBA Recovery Loan Queue awaiting the availability of funds or as a non-Recovery Act loan (with all applicable fees and a lower guaranty).

Should I ask that my loan application be submitted as a Recovery Act loan?

  There are several important factors that a small business applicant, lender or CDC should consider when deciding whether to submit a new loan application as a Recovery Act loan that, if conditionally approved will be placed in the SBA Recovery Loan Queue awaiting the availability of funds or as a non-Recovery Act loan (with all applicable fees and a lower guaranty). They are:

1. What phase is the Recovery Act Transition Period in as represented by the color-coded Transition Phase Indicator on the website

                       

2. How soon does the small business need access to the loan funds?

3. What is the total number and dollar amount of new loan applications pending in the SBA Recovery Loan Queue?

4. What is the total number and dollar amount of the pending requests for increases to previously approved Recovery Act loans?

5. What is the total number and dollar amount of loan increases and new loan applications that were funded the previous business day? and

6. How many days remain until February 15, 2010, the last date that funds from cancelled Recovery Act loans can be used to fund new

    Recovery Act loans ?

 Source: SBA.gov

Keep in mind these are the key dates in the Transition Period for the Recovery Act?

The Transition Period begins on November 23, 2009 and ends on September 30, 2010.

November 23, 2009:  The beginning of the SBA Recovery Loan Queue.

January 15, 2010:  The last day that new loan applications that have been conditionally approved by SBA subject to Recovery Act funding may be placed in the SBA Recovery Loan Queue awaiting funds.

February 15, 2010:  New Recovery Act loan applications that are in the SBA Recovery Loan Queue and have not been funded from Recovery Act funds will be withdrawn by SBA.  Withdrawn Recovery Act loan applications may be re-submitted by the lender as non-Recovery Act loans subject to the applicable fees and the reduced SBA guaranty percentage.

September 17, 2010:  The last day that new requests for increases to previously approved Recovery Act loans that have been conditionally approved subject to Recovery Act funding may be placed in the SBA Recovery Loan Queue awaiting funds.

September 24, 2010:  It is extremely important that lenders and CDCs notify SBA of any previously approved Recovery Act loans that they have cancelled as soon as possible and no later than September 24, 2010.

September 30, 2010: Any request for a loan increase remaining in the SBA Recovery Loan Queue awaiting funding that has not been funded by 11:00 p.m. Eastern Daylight Savings Time (EDST)  will be withdrawn by SBA.  If withdrawn by SBA, these requests may be submitted to SBA as a new, non-Recovery Act loan subject to the applicable fees and the reduced SBA guaranty percentage.

Source: SBA.gov Wise Man Finance

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Article Tags: applicable fees, business applicant, business day, business need, cdc, guaranty, important factors, key dates, last date, loan application, loan applications, loan funds, pending requests, recovery act, sba, span style, style text, text decoration, transition period, transition phase



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