Ebsco Spring Co. is just one small business that has benefitted from a U.S. Small Business Administration loan in the past few years. The $1.875 million loan took this spring manufacturer from layoff and temporary shutdown two years ago to a record year thus far.
Many small businesses have used SBA-backed loans as their lifeline during the financial crisis.
Ebsco CEO and president Cheryl Dooley claims that the SBA loan she received saved her company. Once the economic recovery began, her business was slow to get back on track, but thanks to this financing and hard work, things have gotten better.
Manufacturers in particular have benefitted from funding provided by the SBA.
The White House saw the urgency of getting credit to small businesses a few years ago. As a result, it increased loan guaranties and reduced lending fees. Many small businesses benefitted and though some of the measures are no longer effective, the SBA is still looking for ways to support manufacturers and strengthen the U.S. economy.
SBA Regional Administrator Yolanda Garcia reported that nearly ten percent of SBA loans are issued to small manufacturers. In 2010, this equated to these businesses holding $1.6 billion in SBA financing.
The most popular SBA business loan is the 7(a), which still has a limit of $5 million, increased from $2 million a few years ago. In cities like Tulsa, where Ebsco is located, the dollar value of SBA small business loans its outpacing the 2010 figure.
Financing like cash advances is not an option for most small businesses because they need longer-term solutions. An SBA loan can provide the cash needed with fees lower than other forms of borrowing.
Many businesses are still experiencing a slow recovery from the financial crisis and are unable to meet stricter credit standards imposed by banks, making an SBA loan even more attractive.
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