As the U.S. government struggles to revive small-business lending, one of its highest-profile incentive programs will lapse — and possibly disappear.
The Small Business Association’s most popular lending programs were helped out by a federal program that reduced fees and backed bank-issued loans at a 90-percent rate. Now that program is running out of money as Congress fights over how to distribute funds.
This isn’t the first time funding has run out on the SBA incentives, which are meant to eliminate risks that make lending unappealing to struggling banks. The program lapsed late last year, and a second round of funding is expected to run out this month.
Small business advocates say the lapses in support undermine efforts to get companies hiring.
So far, the program is getting mixed reviews. Lending got off to a slow start after the incentives were introduced, but picked up when the program got its second wind late last fall.
Know a small business you think we should write about? Contact Herald writer Amy Rolph at arolph@heraldnet.com.
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