One of the main gripes heard during the Great Recession was lack of access to capital for small business.  Access to capital now appears to be gaining on a number of fronts.

New SBA programs
The Small Business Administration’s Advantage Loan Initiatives expands access to capital for small businesses and entrepreneurs in undeserved communities by encouraging lenders to make loans.

On February 11, 2011, two initiatives launched:

  • Small loan advantage offers loans up to $250,000 through existing SBA lenders by offering government guarantees of 85% for loans up to $150,000 and 75% for loans greater than $150,000. Most loans can be approved in a matter of minutes through electronic submission, with streamlined paperwork.
  • Community advantage is a 3-year pilot program to increase the number of 7(a) lenders. The program offers the same loan sizes and guarantees

As lenders take advantage of these initiatives, more funding will be available to many more small businesses.

New federal funding for states
Connecticut, Missouri, and Vermont are getting a total of $53.4 million from the federal government. Under a program called the State Small Business Credit Initiative, which was created under the Small Business Jobs Act of 2010, federal funds are given to states that have successful lending programs in place.

Under this program, California, Michigan, and North Carolina already received a total of $293.8 million. A successful loan program means that each $1 of federal funds results in $10 of new lending to small businesses.

The program has a pot of $1.5 billion in grants available for successful state lending programs, so look for more state opportunities in the future.

Angel investors
Angel investing was down in 2010, but could be on the upswing; there seems to be a buzz about angel investing these days. Stats on angel investing are hard to come by.  However, a new report called the “Halo Report” will start to track early stage investments by angels. Look for the first report in the second half of this year.

We should also learn more about what’s going on in angel investing following the 2011 Angel Capital Association Summit, which will be held on April 4-6, 2011, in Boston.