On November 23, 2009, the SBA began the transition period from two of its Recovery Act programs. The funds made available from the Recovery Act eliminated the upfront guaranty fee for loans with maturities greater than 12 months as well as provided higher SBA guaranties to lenders for most 7(a) loans.

On December 19, 2009, the President signed the U.S. Department of Defense Appropriations Act, 2010. This legislation provides additional funding to support approximately $4.5 billion in new 7(a) and 504 loans under Sections 501 and 502 of the American Recovery and Reinvestment Act of 2009 (the “Recovery Act”). Specifically, these funds are available for the payment of certain 7(a) and 504 loan fees and a higher SBA guaranty for certain 7(a) loans. With this new funding the status of the Transition Phase Indicator is now Green, signifying that sufficient funding exists to approve all eligible loan applications. As a result, SBA will be suspending the 7(a) and 504 Recovery Loan Queues on January 8th, 2010.

SBA estimates that the recent appropriation will be sufficient to fund 7(a) and 504 Recovery Act loan activity through approximately the end of February, 2010. SBA will reactivate the Queues and change the Transition Phase Indicator to Yellow, as necessary, when funds are close to being exhausted.