Last week, President Bush signed into law an extension of the Small Business Administration?s popular 7(a) loan program. After being cut in January, and later reinstated temporarily, this new action adds a bit more stability to the program.

The new legislation also raised the SBA?s funding by $3 billion to $12.5 billion. The funding means loans for up to 90,000 small businesses, which translates into about 500,000 jobs created or retained according to the SBA.

The legislation also removes a $750,000 cap on 7(a) loans, returning the popular program to its previous level of $2 million. It also allows banks to ?piggyback? loans on top of an SBA-guaranteed loan, increasing the financing a small business can receive.

The 7(a) loans are popular with start-ups because the program offers an "express" option that simplifies the application process. A borrower can also qualify more easily for a 7(a) loan than other kinds of bank loans.

The shortfall in the 7(a) loan program did not affect another popular SBA loan called the 504 program. A 504 loan provides long-term, fixed-rate financing for real estate purchases, construction and capital improvements.

For more information about SBA loans, see your local commercial lender.