In response to the credit crunch, U.S. Small Business Administration Acting Administrator Sandy K. Baruah last week announced key loan program changes to help the agency’s lending partners increase access to capital for small businesses.

First, the SBA will allow lenders to use the one-month LIBOR interest rate (London Interbank Offered Rate) as the base rate for price certain loans...

.. 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, the agency said, especially with the current market conditions. Because the average interest rate is used, these pools are easier for institutions to create, thus providing incentives for more investors to bid on these loans.

Full Story: SBA looks to increase available capital Source: Providence Business News, November 14th, 2008 Author: William Hamilton Added on November 18th, 2008 at 9:33 am, by Matt Mikula