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Jobs Act makes SBA loans available

John Miranda is the supervisor of business development at the Small Business Administration's Madison District Office. Photo by Randy Hanson1 / 2
Seventy-five local businesspeople attended a Hudson Area Chamber of Commerce "Good Morning Hudson" program at the Hudson Golf Club last Thursday. An SBA official reported on the services and financing available through the federal agency. Photo by Randy Hanson2 / 2

The 2010 Small Business Jobs Act signed into law by President Obama in late September greatly increased the funding available through Small Business Administration loan programs, an official told a Hudson audience last Thursday.

John Miranda, supervisor of business development at the SBA's Madison office, spoke to 75 local businesspeople who attended a Good Morning Hudson program put on by the Hudson Area Chamber of Commerce and Tourism Bureau. It was held at the Hudson Golf Club.

The Jobs Act made an additional $30 billion available for community banks to use in lending to small businesses, Miranda reported.

And it increased the maximum amount that can be borrowed under the SBA's two main loan programs, 7(a) and 504, to $5 million. The previous maximum was $2 million.

The law also encourages banks to lend by increasing the government guarantee on 7(a) loans to 90 percent through the end of the year. It had been 75 percent.

In addition, the 2- to 3-percent fee the SBA charges for guaranteeing loans has been waived through the end of the year.

Lenders usually pass the fee on to the borrower, Miranda said, so its elimination should result in significant savings to borrowers.

"We're trying to entice them (to make loans)," he said regarding the new incentives for lenders.

Miranda gave an overview of Small Business Administration services.

While the SBA is best known for helping businesses get financing, it also provides business counseling, assists companies in applying for federal contracts, helps them sell their products abroad and serves as an ombudsman in their dealings with other government agencies.

Small Business Development Centers partially funded by the SBA help with the development of business plans and offer a wide range of management and technical assistance.

The SDBC serving St. Croix, Pierce and Polk counties is located at UW-River Falls. Steve DeWald of the College of Business and Economics directs the office in Room 128 of South Hall, 410 S. Third St. More about the center, including contact information, is available online at

"Having a business plan is an absolute must," Miranda said. He quoted the adage: "Small businesses don't plan to fail. They just fail to plan."

The SBA also offers a network of 110 Women's Business Centers that provide business training and mentoring geared to female owners and women interested in starting businesses.

There's a Western Dairyland Women's Business Center at 418 Wisconsin Ave. in Eau Claire. Information about it can be found online at

The 7(a) loan is the SBA's primary business loan. It is the agency's most-used loan program because of its flexibility in structure, variety of uses and availability, Miranda said.

He emphasized that the SBA doesn't lend money, but guarantees repayment to banks that make the loans. The lender has to certify that it would not provide the loan under the proposed terms without the SBA's guarantee.

The 504 loan program is used primarily for financing land, building and equipment purchases.

The 504 loans are provided through certified development companies that work with the borrower, banks and other lenders to arrange deals.

The Wisconsin Business Development Finance Corp. has an office at 1810 Crest View Drive, Unit 5B, in Hudson that is manned by loan officer Jeremy Price. Price can be contacted at (715) 381-6719.

Most of Hudson's banks are qualified SBA lenders and have loan officers experienced in the agency's programs.

Miranda said that since 1994, the farthest back in records that he could go, the SBA has guaranteed more than $4 billion in 7(a) loans and $1 billion in 504 loans in Wisconsin.

In fiscal year 2009, $5.9 million in 7(a) loans and $6.9 million in 504 loans were approved in St. Croix County, he reported.

Miranda encouraged businesspeople to contact the Madison District Office of the SBA, 740 Regent St., Suite 100, with any questions about the services and loan programs offered by the agency. The phone number is (414) 297-3941. Information is also available online at

First American Bank, headquartered in Hudson, sponsored the Good Morning Hudson program.

Randy Hanson

Randy Hanson has reported for the Star-Observer since 1997. He came to Hudson after 11 years with the Inter-County Leader at Frederic, and eight years of teaching social studies. He’s a graduate of UW-Eau Claire.

(715) 426-1066