76.7 F
Charlotte Amalie
Thursday, March 30, 2023


March 31, 2004 – Passage in Congress on Wednesday of legislation reopening the Small Business Administration's 7(a) Loan Program is good news for small businesses in the Virgin Islands, Delegate Donna M. Christensen said.
"Access to capital is still the main challenge that faces small businesses that want to remain viable in today's economy," Christensen, a member of the House Small Business Committee, said in a release. "This legislation strengthens the 7(a) program, which serves as the core lending program for 30 percent of all long-term small businesses in the country."
According to the release, changes in the program brought about by the legislation include:
– Lifting restrictions on loan size.
– Reinstituting working export capital loans.
– Increasing loan guarantees to $1.5 million.
– Removing regulatory restrictions on SBA loan refinancing.
– Extending of the 504 and Small Business Investment Companies (SBIC) programs.
The 7(a) program enables businesses that ordinarily would not be eligible for bank loans to get financing by having the SBA guarantee the loans. The maximum loan amount under the program is $2 million, but most loans are smaller, since the SBA will guarantee no more than $1 million.
The 504 program grants long-term, fixed-rate loans to growing businesses for purchasing land and buildings, construction, landscaping or modernizing of old facilities. Loans can also be granted for purchasing machinery, equipment and other "major fixed assets." These loans are made through Certified Development Companies, not-for-profit corporations that foster grassroots economic development.
The SBIC program gives small businesses access to equity financing. SBICs are licensed and regulated by the SBA but are privately owned and managed. They use their own capital, plus funds borrowed at favorable rates with a SBA guarantee, to make venture capital investments in small companies.
According to Christensen's release, the SBA granted 16 7(a) loans to Virgin Islands businesses totaling $2.8 million in fiscal year 2003 and 16 such loans totaling $1.9 million in FY 2002.

Publisher's note : Like the St. John Source now? Find out how you can love us twice as much — and show your support for the islands' free and independent news voice … click here.

Print Friendly, PDF & Email
Keeping our community informed is our top priority.
If you have a news tip to share, please call or text us at 340-228-8784.

Support local + independent journalism in the U.S. Virgin Islands

Unlike many news organizations, we haven't put up a paywall – we want to keep our journalism as accessible as we can. Our independent journalism costs time, money and hard work to keep you informed, but we do it because we believe that it matters. We know that informed communities are empowered ones. If you appreciate our reporting and want to help make our future more secure, please consider donating.