SMALL BUSINESS JOBS ACT:

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1 SMALL BUSINESS JOBS ACT: HIGHER MAXIMUM LOAN SIZES, REVISED SIZE STANDARDS What advantages does the Small Business Jobs Act bring to companies in Alabama? SBA Express: SBA Express loan limits have been temporarily raised from $350,000 to $1 million for one year. These loans offer a streamlined application process with reduced paperwork and approval often in a matter of days. Unlike traditional 7(a) loans, SBA Express loans carry a 50 percent guarantee and can be used as revolving lines of credit to help restock inventories and support larger revenue sales which are particularly critical for small businesses as they emerge out of the recession. Maximum Loan Amounts: SBA has permanently increased 7(a) and 504 limits from $2 million to $5 million, and for manufacturers and certain energy-related projects seeking 504 loans, to $5.5 million. The maximum for International Trade and Export Working Capital loans also has been increased from $2 million to $5 million. Size Standards: SBA has already put in place the alternate size standard that expands eligibility for SBAbacked loans to include those small businesses with less than $15 million in tangible net worth and $5 million in net income (average over two years). SBA increased the size standards for 46 industries involved in Retail Trade, including car dealerships with under 200 employees. Five industries that fall under Accommodation and Food Services have been revised upwards, as well as 18 other industries in the Service sector. Fee Reductions: The reduced fees for 504 and 7(a) programs have been extended until December 31st, or until $505 million in appropriations to support them is used. The 90% 7(a) guarantees have also been extended until December 31 st. Debt Refinancing: The Act also creates a temporary 2-year program of business debt refinancing through the 504 program. This temporary program allows the applicant to bypass the usually required job creation/preservation goals of one job for every $65,000. This enables 504 to be used for refinancing of qualified existing debt without business expansion. Microloans: SBA permanently increased microloan limits from $35,000 to $50,000, helping larger entrepreneurs with start-up costs and small business owners in underserved communities. Export Express: The Act raised the limit on Export Express loans, from $250,000 to $500,000, and made the program permanent. The SBA Export Express program provides exporters and lenders a streamlined method to obtain SBA backed financing for loans and lines of credit.

2 Tax Credits: The new law contains $12 billion in tax credits targeted to small businesses, including higher deductions for investing in new machines/equipment, zero capital gains for those who buy and hold small business stocks for five years, and a doubling of the maximum deduction for startups to $10,000. It also allows self-employed Americans to completely deduct health insurance costs for themselves and their families Across the country, there are small businesses owners who are in a position to take that next step to grow and create jobs, and these larger loan sizes provide another tool to help them do just that, SBA Administrator Karen Mills said. Whether they re in the start-up phase and could use a microloan or are looking to take advantage of lower real estate prices and interest rates to buy a new building to expand, SBA loans can now be an even greater resource to help entrepreneurs and small business owners get the capital they need. The Jobs Act also includes additional resources to help increase lending to small businesses, including the State Small Business Credit Initiative announced by the Department of Treasury that will support $15 billion in lending through local programs and the Small Business Lending Fund, which will provide capital to local, community banks to increase their lending to small businesses. For more information on SBA Loan Guarantee Programs, and to find out if your business qualifies for SBA programs, please call one of our certified business counselors at

3 7(A) LOAN LIMITS General 7(a) Loan Limitations* Before As a result of the Small Business Jobs Act Small Business Act Reference Maximum Loan Amount $2,000,000 $5,000,000 7(a)3(A) Guaranty to any one Borrower (including all affiliates) $1,500,000 $4,500,000 (90%) through 12/31/2010 $3,750,000 (75%) beginning 1/1/2011 7(a) 3(A) Maximum SBA guaranty percentage 85% for loans of $150,000 or less; 75% for loans greater than $150,000 90% for all loans through 12/31/2010 Beginning 1/1/2011: 85% for loans of $150,000 or less; 7(a) 2(A) *The Small/Rural Loan Advantage process continues to be limited to loans of $350,000 or less. International Trade Export Express (made permanent by the Small Business Jobs Act) Before As a result of the Small Business Jobs Act Reference Maximum Loan Amount $250,000 $500,000 7(a)(35)(C) 85% for loans of $150,000 or less 90% for loans of $350,000 or less 75% for loans greater than $350,000 7(a)(35)(C)

4 Export Working Capital Program (EWCP) Maximum Loan Amount $2,000,000 $5,000,000 7(a)(14)(B) $1,500,000 $4,500,000 7(a)(2)(D) Maximum SBA guaranty percentage 90% up to a loan of $1,666,667, with a declining percentage thereafter (as the maximum guaranty was $1,500,000) 90% 7(a)(2)(D) International Trade Loans Maximum Loan Amount $2,000,000 $5,000,000 7(a)(3)(B) $1,500,000 $4,500,000 7(a)(3)(B) Maximum SBA guaranty percentage 85% for loans of $150,000 or less 90% 7(a)(2)(E) International Trade and EWCP Loan Limits When Combined (The loan and guaranty limits for each when a small business borrows both an IT loan and an EWCP loan) Maximum Combined Loan Amount $2,000,000 $5,000,000 7(a)(3)(B) Guaranty Total: $1,750,000 (guaranty amt.) EWCP Loan: $1,250,000 (guaranty amt.) Total: $4,500,000 (guaranty amt.) EWCP Loan: $4,000,000 7(a)(3)(B) IT Loan: Difference between Total and EWCP guaranteed portion (guaranty amt.) IT Loan: Difference

5 SBA Express (does not include Community Express, Patriot Express or GO Loans) Before As a result of the Small Business Jobs Act Small Business Act Reference Maximum Loan Limit $350,000 $1,000,000 through 9/26/2011 7(a)(31)(D) Maximum SBA guaranty percentage 50% No change $350,000 beginning 9/27/2011 Community Express, Patriot Express, and GO Loans Before As a result of the Small Business Jobs Act Small Business Act Reference Maximum Loan Limit $250,000 (Comm. Exp.) No change (pilot program) Pilot Program $500,000 (Patriot Exp.) $150,000 (GO Loans) Maximum SBA guaranty percentage 85% for loans of $150,000 or less; 75% for loans greater than $150,000 90% for all loans through 12/31/2010 Beginning 1/1/2011: 85% for loans of $150,000 or less; Pilot Program