My bank says they've maxed out on their SBA loans. What does that mean? I thought there was more money being pumped into the SBA loan program?

What that means is that the Banks have used the loans to build more banks.... NOT LOANING MONEY TO THE SMALL BUSINESSES LIKE US !!!

Small business-specific loans are the subject of much debate in the wake of recent federal stimulus efforts, as well as the current recession. Most banks have a fixed number of small business loans they give each year. If a loan applicant’s bank is not offering small business loans, one of the following is the likely reason: the bank has given out all of their small business loan money; the bank does not want to go through the paperwork-intensive process of securing additional loans from the Small Business Association (and even if the bank secured an SBA guarantee, the bank doesn’t have the funds); or, under the new more stringent lending standards to which banks are now subject, the loan applicant does not qualify for the credit. An interesting example is the SBA ARC loan program which is specifically for distressed businesses. New government standards are so strict that only 3,000 loans have been given nationwide.

Thanks Dave and Rex for your comments. As always, we appreciate hearing from our members.

I have been in the position where I needed a loan and turned to "SBA lenders". My experience has been, if you cannot meet the banks own credit requirements it is highly unlikely you will get an SBA Loan. If you don't have collateral, i.e., real estate, Accounts Reeciveable, Cash or other assets, banks are not going to loan you money today. They, especially community banks are under tremendous pressure from government regulators. The Credit Card companies used to be an option, no longer due the stricter government regulations and economy. Frankly, these are times when your only alternative is to tuen to family and friends to help you. There is plenty of cash out there if you are an honest, hard-working entreprenuer with a honest to goodness business oppoertunity. They are getting less than 2 pints on their safe investments, CDs, Money Market funds and the like. Offer them a good return - 8-9 points within a reasonable time period - one that you are confident you can pay back the loan. be professional about it. Go online, download a legal promissory note and execute it. If I had not done the same thing years ago, my business would not be 21 years old. All the best!