We covered small business lending a lot this week as new data and statistics found although lending has ticked up recently. However, this bounce has paltry when compared to the significant decline ahead of it and worries of lending hitting stall speed remain as lending standards have been raised significantly by the banks. We offered some common alternatives to large financial institutions on our Economy & Markets page yesterday but dangers still loom. Indeed, at the worst opportune time, two budget-neutral economic recovery programs for small businesses are set to expire in if the do-nothing Congress remains while nearing the elections. The two programs are the refinance provision of the U.S. Small Business Administration (SBA) 504 loan program and the First Mortgage Lien Pooling (FMLP) program. These programs have provided needed liquidity and access to credit for small businesses over the past 18 months, but they risk disappearing should Congress fail to act. The Huffington Post continues, “SBA loan volumes increased in late 2011 and 2012 due in large part to these programs. SBA 504 refinances accounted for 14.7 percent of all SBA 504 loans made in the first quarter of 2012, and 20.6 percent of total SBA 504 dollars during that time period. Nearly 15 percent of all SBA 504 loans made today are FMLP loans.

In an effort to save these two budget-neutral SBA lending programs, I launched an online petition asking the U.S. House of Representatives Committee on Small Business and U.S. Senate Small Business & Entrepreneurship Committee leaders to extend the two programs by one year each. Availability of capital is still the biggest obstacle facing small business owners in the U.S. today. Despite record-low commercial loan interest rates and easier access to lending capital for major banks, heavy regulatory pressure has limited traditional lenders from approving more small business loans. Excessive regulations on major banks have made it nearly impossible for even successful and growing small businesses to obtain financing…”