As of Oct. 1st, 2009 SBA increased 7a loan amounts to $500,000 for good will and other intangible assets. The buyer can now access more SBA financing than previous rules allowed. It allows the seller to sell the business for a value that’s real in the marketplace as opposed to curbing the value because of the limitations on goodwill. Raising of the 7a SBA Loan goodwill will enable more movement in small business buying and selling.
In my opinion, this is a logical progression of the American Recovery and Reinvestment Act. This Act led to a rebound in SBA-backed loans for small businesses, particularly in Iowa. Since February 17, the SBA in Iowa has underwritten nearly $184 million in loans, and has seen average weekly dollar volume increase by more than 150 percent.
In general, as I predicted, the “Stimulus” made more credit available to small businesses, lowered SBA loan fees, raised SBA guarantees to as high as 90 percent under the 504, and reinvigorated the secondary markets for SBA-guaranteed loans.
Raising of the 7a SBA Loan goodwill will enable more movement in small business buying and selling.