SBA Loan Changes Seek to Increase Capital Access For Small Businesses

WASHINGTON, DC – Important changes have been made to help SBA lenders increase access to capital for small businesses.

The first major change permits new SBA loans to be made with an alternative base interest rate, the one month LIBOR rate, in addition to the prime rate, which was previously allowed. In recent months, both the prime and LIBOR rates have not yet returned to their historical relationship of roughly 300 basis points. The change seeks to correct the mismatch between the rates which are apparently squeezing SBA lenders out of the lending market, since their costs are based on the LIBOR rate.

The second change allows a new structure for assembling SBA loans into pools for sale in the secondary market. The enhanced flexibility in loan pool structures can help affect profitability and liquidity in the secondary market for SBA guaranteed loans. In turn, by using the average interest rate loan pools are easier to create, providing more investors with an incentive to bid on these loans.

“The challenge small businesses face today is not the cost of capital, it is access to capital,” said SBA’s Acting Administrator Sandy K. Baruah. “Interest rates are at historically low levels meaning money is inexpensive, yet lenders aren’t lending and borrowers aren’t borrowing. This indicates markets are frozen due to liquidity concerns. This interim final rule is an important step to re-energize the lenders to make SBA-backed loans and will help open the gateway of capital for entrepreneurs.”

To learn more about SBA’s guaranteed loan programs visit www.sba.gov.

Innkeepers Get Creative to Attract Off-Season Guests

A recent article in the Portland Press Herald highlighted how Maine innkeepers looking to market off-season accommodations have found success by offering guests packages appealing to their special interests. The special packages go well beyond offering discounted room rates and romantic get aways, and are attracting visitors interested in a wide range of activities, workshops and niche past times.

Although food centered activities such as chocolate making and gourmet cooking seem to be among the most prevalent, the range of entertaining offerings is wide and interesting. 

The Waldo Emerson Inn in Kennebunk offers quilting events which reportedly generate about half of the inn’s winter receipts. The Camden Harbour Inn in Camden now offers historical walks as part of their Thanksgiving package. 

At the Kendall Tavern Inn Bed and Breakfast in Freeport, spiritual retreats and calligraphy, scrapbooking and quilting events have filled the inn at times when vacancies are otherwise high. Alpaca and fiber arts workshops are offered at The Royalsborough Inn at the Bagley House in Durham.

The special packages do more than fill time for guests and from a marketing and financial perspective appear to make good sense. For one thing, the activities insure guests will have something interesting to do while visiting in the dead of winter. Innkeepers offering group type special events such as murder mystery weekends, report such events tend to attract group travelers. The events also promote repeat visits, provide an opportunity to turn a causal inquiry into a booking, and support continued employment for the most well-trained staff.

Cape Cod innkeepers already offering or planning to offer off-season special packages with a niche theme are encouraged to comment or share interesting insights.

To read the full Portland Press Herald article, INNovative Lodging Ideas click here.