The process of putting a new law into practice can sometimes take a while. A new two-year Small Business Administration program is taking longer than usual. With one-quarter of the available time already gone, the program has yet to get rules or a process.
SBA refinancing program
During late 2010, a new Small Business Administration refinancing program was passed by Congress. The program was intended to last two years. The program would support the refinancing of business property debt. Small businesses are facing balloon payments on the relatively short-term loans on their businesses. The refinancing program would help remove balloon payments and reduce mortgage payments for struggling businesses. The program is written to last for 24 months only.
Waiting for new rules on refinancing
The 24-month SBA refinancing program has been law for the last six months. In those six months, however, the SBA has not yet written rules for the program. The rules and regulations for the program must be written before loans can be offered. Even though the rules and regulations for the program have not yet been written, the two-year clock on the program has already started running out. This means that once rules are written, the program could only have 16 months to distribute and back loans. While business leaders have indicated they appreciate the SBA taking time to write the regulations right, they are also frustrated with the quickly expiring timeline.
Businesses already applying
Though the Small Business Administration has yet to trip the switch on the refinancing program, businesses are applying. Everywhere from Baltimore, Md., to San Fransisco, Calif., businesses are turning in applications. These “conditional” applications cannot be approved until the SBA writes regulations for who may or may not qualify for these loans. These applications will be processed first when the loan rules are finally written.