U.S. Small Business Administration.
Notice, changing of job requirements.
This Notice specifies the job creation or retention requirements under SBA's Development Company Loan Program (504 Program), and the changes made to these requirements by the American Recovery and Reinvestment Act of 2009.
Effective Date: This notice is effective April 10, 2009.
Applicability Date: The changes to the job creation or retention standards made by the American Recovery and Reinvestment Act that are specified in this notice apply to new loan applications received on or after February 17, 2009.Start Further Info
FOR FURTHER INFORMATION CONTACT:
The SBA district office nearest you; the list of offices can be found at http://www.sba.gov/localresources/index.html.End Further Info End Preamble Start Supplemental Information
The American Recovery and Reinvestment Act of 2009 (the Recovery Act), Public Law 111-05, was enacted on February 17, 2009 to among other things, promote economic recovery by preserving and creating jobs, and assisting those most impacted by the severe economic conditions facing the nation. Among ARRA's several initiatives to re-invigorate small businesses is the revision of the job creation goals of SBA's 504 Program.
The purpose of the 504 Program is to foster economic development and create and preserve job opportunities in both urban and rural areas by providing long-term financing for small business concerns. Loans made under the 504 Program are principally used by small businesses to build or to purchase long-term fixed assets (mostly acquiring land and constructing or renovating commercial buildings) to assist in the growth of the business.
II. Job Creation or Retention Requirements
Under the 504 Program, a 504 loan is required to create or retain a minimum number of jobs within two years of the disbursement of the loan as a result of the project or to meet other defined economic development objectives (13 CFR 120.861-120.862).
The standards for determining whether a project meets the job creation or retention requirements are set forth in section 501(e) of the Small Business Investment Act.
In the Section 504 Loan Application, the borrower will enter the number of jobs to be created or retained as a result of the project and the CDC will verify that it meets the job creation or retention requirements. In addition, the job impact data will continue to be entered into SBA's database, and the application data combined with data from annual CDC reports will be used to report the total number of jobs created or retained.
To stimulate the growth of small business and create more job opportunities, section 504(b) of the Recovery Act, amends the minimum number of jobs that are required to be created or retained per dollar amount guaranteed by SBA by increasing such dollar amount from $50,000 to $65,000, as follows:
(1) A Project must create or retain one Job Opportunity per $65,000 of 504 loan funding, or
(2) For Projects that are eligible under the 504 Program under 13 CFR 120.862, a CDC's portfolio must reflect an average of one Job Opportunity for every $65,000 guaranteed by SBA.
The remaining amounts listed below are unchanged from the amounts set forth in section 501(e)(1) and (3) of the Small Business Investment Act of 1958:
(1) A Project must create or retain one Job Opportunity per $100,000 of 504 Start Printed Page 16433loan funding in the case of a project of a small manufacturer.
(2) For Projects in Alaska, Hawaii, State-designated enterprise zones, empowerment zones and enterprise communities, labor surplus areas, as determined by the Secretary of Labor, and for other areas designated by SBA, the CDC's portfolio may average not more than $75,000 per job created or retained.Start Signature
Director, Office of Financial Assistance.
[FR Doc. E9-8157 Filed 4-9-09; 8:45 am]
BILLING CODE 8025-01-P