President Obama

Published on: Tuesday, February 09, 2010

By Nancy Royden

Oasis Mechanical Contractors Inc., of Lanham, had a very special guest last Friday.

President Barack Obama came to announce he is expanding two Small Business Administration lending programs. Their goals are to allow small business leaders to refinance and increase limits for working capital.

“The true engine of job creation will always be businesses. What government can do is fuel that engine: by giving entrepreneurs and companies the support to open their doors, expand and hire more workers. Today, we’re taking another step toward assisting small business owners get the capital they need to grow and hire,” Obama said.

Currently, the programs are legislative proposals to help small businesses through lingering difficult credit markets, said Joyce H. Mears, spokeswoman for the SBA.

Oasis Mechanical Contractors is located on Assembly Drive, and it is led by President Rick Cummings and Vice President Dennis Bean.

Since opening in 2003, Oasis has received government help from two SBA loans, including a $35,000 loan through the American Recovery and Reinvestment stimulus package last year, according to a Gazette report.

The report stated that Obama spoke in Oasis’s warehouse, and Cummings and Bean were joined by SBA Administrator Karen G. Mills and to more small business owners, Ruth Gresser of Pizzeria Paradiso in Washington, D.C., and Willem Polak of Potomac Riverboat Co. in Alexandria, Va. Both companies have received SBA loans.

Before Obama spoke for 10 minutes, all four business owners spoke with him during a private meeting.

Mills said the proposals will provide the SBA with tools to help small businesses meet challenges spurred by the recession.

“First, in the tight credit market of the last two years, lines of credit have been cut for small firms. Raising the limit on SBA Express loans to $1 million will mean more small business owners will have quicker access to this source of capital to help restock inventories and support larger revenue sales, and literally take that next step to grow their business and create new jobs,” she said.

Unlike traditional 7(a) loans ,lenders can use their own paperwork for SBA Express loans, which can be structured as revolving lines of credit. Currently, Express loans are capped at $350,000 and carry a 50 percent guarantee. Fees would cover virtually all the added costs of this proposal, according to the SBA.

Mills said thousands of good, creditworthy businesses are being affected negatively by declining real estate values due to the recession.

“With many of them now facing mortgages coming due in the next few years, the ability to refinance into SBA’s 504 loan will give them a chance to lock in long-term, stable financing, we well as protect jobs by protecting small businesses from foreclosure,” Mills said.

Currently, 504 loans cannot be used for the refinancing of maturing debt. This change would respond to the difficulties many current, solvent borrowers face in refinancing existing commercial real estate loans, according to an SBA media release.