MORNING STAR • july 2 - 8, 2009
PAGE 37
100 days after the Recovery Act By Jayne Armstrong
It has been a little more than 100 days since the President signed the American Recovery and Reinvestment Act (Recovery Act). In that time the U.S. Small Business Administration (SBA) has implemented new programs to get credit flowing again and has several more on the way that will help small businesses weather this economic storm, and ultimately continue to grow and create jobs. First and foremost, we enhanced our top two loan programs – 7(a) and 504 – which have so far resulted in $4.3 billion in new loans for small businesses. The SBA temporarily eliminated fees for borrowers on its 7(a) loans and for both borrowers and lenders on its 504 loans. The
ACE partners with Delmarva Power
Rommel’s ACE Hardware stores in Cambridge, Ocean City, Salisbury and Stevensville, Md. are seeing an increase in sales in compact fluorescent light bulbs (CFL) due to a partnership with Delmarva Power. Delmarva Power subsidizes the cost of the compact fluorescent bulbs and Rommel’s sells the energy efficient bulbs to their customers at a reduced rate. Using a compact fluorescent light bulb (CFL) will save about $30 over its lifetime and pay for itself in about six months. It uses 75 percent less energy and lasts about 10 times longer than an incandescent bulb. The 13W (60W equivalent brightness) retails for $.99 and the 23W (100W equivalent) is $1.99. Dimmable and 3-way bulbs are also available. The Salisbury store is currently offering an in-store recycling program for CFL bulbs. Delmarva Power will also offer a $25 mail in rebate on all Energy Star appliances and air conditioners.
ACE opens in Chincoteague
Rommel’s ACE recently celebrated the grand opening of its Chincoteague, Va. store. The first 200 customers received either a free ACE bucket or ACE re-usable shopping bag. Customers also received 20% off their entire purchase during the event. This sale was also honored at the other 11 Rommel’s ACE stores across Delmarva. The Chincoteague store, which opened in February, is the former Parks Hardware and Paint store located at 6735 Maddox Ave.
SBA also temporarily raised the guarantee on most of its 7(a) loans to as much as 90 percent, up from 75-85 percent. In this short time, there has been a 30 percent increase in average weekly loan dollar volume compared to the weekly average before the passage of the Recovery Act. Lenders have responded positively to these program changes. From the signing of the Recovery Act on Feb. 17 to May 29, the SBA worked with 484 lenders that had not made an SBA loan since October 2008. Moreover, of those, 219 had not made an SBA loan since at least 2007. This recovery capital is flowing to a broad base of small businesses: 25 percent to rural; 21 percent to minority-owned; 19 percent to women owned; and 9 percent to veteran owned. SBA recently launched the America’s Recovery Capital – ARC – loan program. The ARC loans will provide a “bridge” for many small businesses to the better economic times ahead. This program provides loans of up to $35,000 to viable, but struggling small businesses to help them make debt payments. ARC loans are interest free to the borrower with deferred repayment terms and offer a 100 percent SBA guarantee to the bank. The SBA also makes the interest payments to the bank. With the launch of ARC loans, SBA has now put in place programs implementing 88 percent of the $730 million provided to the agency by the Recovery Act. In addition to the Recovery Act, we have expanded eligibility of our 7(a) program with an alternate size standard, which makes more than 70,000 small businesses newly eligible for SBA support. Also, we are rolling out a pilot program for Dealer Floor Plan financing in July. And, in the coming weeks, we will announce other Recovery Act programs, including an expansion of our microloan program, a loan that uses the 504 loan program to refinance debt, and a guarantee program to stimulate sales of 504 first mortgage pools in the secondary market. America’s small businesses are the key to our nations’ economic recovery. The SBA is using every tool in our toolbox – and creating new ones when necessary – to help small businesses lead us out of these tough economic times.
About the author Jayne Armstrong is the district director of the SBA’s Delaware District Office headquartered in Wilmington.
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