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Background for President Obama's visit to Kokomo
President Obama visited Kokomo Tuesday (Nov. 23) to emphasize the success of the American Recovery and Reinvestment Act (ARRA) and its extensions, known as the Federal Stimulus Package. The most recent extension was the Small Business Jobs Act, signed by the president Sept. 27. It expires in January.
Part of the Federal stimulus waived borrower fees and increased amounts available from popular federal small business loan programs. The stimulus boosted lending from these programs.
The Small Business Jobs Act includes improvements in U.S. Small Business Administration (SBA) 504 and 7(a) loans that create more flexibility for bankers. The maximum net worth of businesses eligible for 504 financing is raised to $15 million and a two-year average net income (after Federal income tax) of up to $5 million. 504 and 7(a) loans can now top out at $5 million. And the 504 ceiling is higher -- $5.5 million – for manufacturers or projects that meet certain energy efficiency standards.
The SBA reports an uptick in financing small companies. Across the nation, it made 54,826 small business loans totaling $16.84 billion in FY 2010 ending September 30. That's $3 billion higher than the year before.
Two companies in Kokomo have received SBA 504 loans recently. Community First Bank and the Indiana Statewide Certified Development Corporation issued both loans.
Westwind Wood Specialties Westwind Wood just expanded into the Kokomo area producing custom wood cabinet components. It's basically an expansion startup, with 5 jobs currently but expectations are the number will increase dramatically over the next 5 yrs.
The SBA 504 loan was part of the funding story. Landing Westwind Wood and getting it up to speed is a team effort involving the company, Kokomo's "revolving loan fund" and a consortium of three financial institutions, including Community First.
Stephens' Machine, Inc. Open for two years, Stephens' Machine is a complete machine, panel, and machine assembly and steel fabrication shop with about 25 employees. Its SBA 504 financing also came from Community First Bank and the Indiana Statewide CDC.
About the Indiana Statewide Certified Development Corporation
Indiana Statewide CDC works with local lenders to provide loans from the U.S. Small Business Administration (SBA) 504 loan program for expanding companies. Congress created the SBA 504 program to help small businesses gain favorable financing terms and retain operating cash while expanding. Indiana Statewide CDC is the leading SBA 504 lender in Indiana.
Executive Director Jean Wojtowicz says that the Indiana Statewide CDC has provided more than $400 million to 920 Indiana companies, creating 26,500 jobs, since 1983.
Wojtowicz is currently board chair of the National Association of Development Companies (NADCO), the trade association for companies certified to issue SBA 504 loans.
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