[Federal Register Volume 76, Number 190 (Friday, September 30, 2011)]
[Notices]
[Pages 60960-60961]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-25186]
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SMALL BUSINESS ADMINISTRATION
Gulf Opportunity Pilot Loan Program (GO Loan Pilot)
AGENCY: U.S. Small Business Administration (SBA).
ACTION: Notice of extension of waiver of regulatory provisions.
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SUMMARY: This notice announces the extension of SBA's GO Loan Pilot,
with modifications, until December 31, 2013. Due to the scope and
magnitude of the devastation to Presidentially-declared disaster areas
resulting from Hurricanes Katrina and Rita, as well as the further
devastation by the April 2011 severe storms, tornadoes and flooding
along the Mississippi River and its tributaries, and most recently
Tropical Storm Lee, which together have had a long-term negative impact
on the recovery of small businesses in the region, the Agency is
extending its full guaranty and streamlined and centralized loan
processing available through the GO Loan Pilot to small businesses in
the eligible parishes/counties through December 31, 2013.
DATES: The waiver of regulatory provisions published in the Federal
Register on November 17, 2005, is extended with modifications until
December 31, 2013.
FOR FURTHER INFORMATION CONTACT: W. Sloan Coleman, Office of Financial
Assistance, U.S. Small Business Administration, 409 Third Street, SW.,
Washington, DC 20416; Telephone (202) 205-7737; [email protected].
SUPPLEMENTARY INFORMATION: On November 8, 2005, SBA initiated the GO
Loan Pilot program, which was designed to provide expedited small
business financial assistance to businesses located in those
communities severely impacted by Hurricanes Katrina and Rita. Under
this unique initiative, SBA provides its full (85%) guaranty and
streamlined and centralized loan processing to all eligible lenders
that agree to make expedited SBA 7(a) loans available to small
businesses located in, locating to or re-locating in the parishes/
counties that have been Presidentially-declared as disaster areas
resulting from Hurricanes Katrina and Rita, plus any contiguous
parishes/counties.
To maximize the effectiveness of the GO Loan Pilot, on November 17,
2005, SBA published a notice in the Federal Register waiving for the GO
Loan Pilot certain Agency regulations for the 7(a) Business Loan
Program. (70 FR 69645). The pilot, including the waiver of regulations,
was designed as a temporary program and was originally scheduled to
expire on September 30, 2006, but was extended to September 30, 2011.
The Agency believes, however, that there is a continuing, substantial
need for the specific SBA assistance provided by this pilot in the
affected areas. SBA, therefore, is extending the GO Loan Pilot, but
with a modification to the previous regulatory waiver published in the
Federal Register on November 17, 2005, as described more fully below.
Under SBA's regulations at 13 CFR120.102, an applicant for an SBA-
guaranteed loan through the 7(a) program must show that the desired
funds are not available from the personal resources of any owner of 20
percent or more of the equity of the applicant. If such personal
resources are readily available, SBA requires that those resources
above a certain amount, which varies with the size of the loan, must be
injected into the applicant firm's financing package to reduce the
amount of SBA's funding. As stated in the Federal Register notice
published on November 17, 2005, this regulation was waived ``in
recognition of the scope and magnitude of the destruction suffered by
these communities as a result of Hurricanes Katrina and Rita and the
need for immediate reconstruction. SBA believes that, due to other
disaster-related exigencies, prospective borrowers under the GO Loan
Pilot will be unable to expediently meet SBA's requirement that
personal resources above a certain amount must be injected into the
firm's capitalization.'' Because the devastation caused by Hurricanes
Katrina and Rita occurred more than six years ago, SBA no longer
believes it is necessary to waive this regulation for loans under the
GO Loan Pilot and, therefore, is not extending the waiver of 13 CFR
120.102.
SBA is extending the waiver of all other regulatory provisions
published in the Federal Register on November 17, 2005 as part of the
GO Loan Pilot program. Specifically, SBA is continuing to waive 13 CFR
120.213(a), 120.214(a) through (e), and 120.215 in order to allow GO
Loan Pilot Lenders to charge the interest rates applicable to the SBA
Express Program as set forth in SOP 50 10 5, Subpart B, Chapter 3. (SOP
50 10 5 may be found on SBA's Web site at http://www.sba.gov/for-lenders, then click on Standard Operating Procedures for a listing of
SOPs.) SBA is also continuing to waive 13 CFR Sec. 120.222 in order to
permit GO Loan Pilot lenders to charge the same fees on GO Loans as
they charge on their similarly sized non-SBA guaranteed commercial
loans.
When compared to other similarly-sized Section 7(a) loans, the GO
Loan
[[Page 60961]]
Pilot portfolio is performing very well, at about one-half the rate of
liquidation and one-quarter the rate of loan purchase compared to all
other 7(a) loans of $150,000 or less. In addition, the demand for GO
Loans has continued during FY2011 in response to the ongoing need to
rebuild the Gulf Coast areas devastated by Hurricanes Katrina and Rita
and the setback in these efforts caused by the several natural
disasters that affected the region this year. The approximate number of
GO Loans is only slightly less than the number of loans approved in FY
2010 at approximately 520 loans.
Thus, the Agency believes it is appropriate to extend this unique
and vital program through December 31, 2013, with no further extensions
after that. In the interim, the Agency will determine whether a program
should be developed that provides for disaster recovery financial
assistance under SBA's 7(a) Business Loan Program that could be applied
to any region that meets a predetermined set of criteria. Accordingly,
the SBA is also extending its waiver of the Agency regulations
identified in the Federal Register notice at 70 FR 69645 with the
exception noted above through December 31, 2013 only.
SBA's waiver of these regulations is authorized by 13 CFR 120.3.
These waivers apply only to those loans approved under the GO Loan
Pilot, which expires December 31, 2013. As part of the GO Loan Pilot,
these waivers apply only to those small businesses located in, locating
to, or relocating in the parishes/counties that have been
Presidentially-declared as disaster areas resulting from Hurricanes
Katrina or Rita, plus any contiguous parishes/counties. A list of all
eligible parishes/counties will be included in an SBA procedural notice
that will announce the extension of the GO Loan Pilot.
Authority: 15 U.S.C. 636(a)(24); 13 CFR 120.3.
Dated: September 26, 2011.
Steven J. Smits,
Associate Administrator, Office of Capital Access.
[FR Doc. 2011-25186 Filed 9-29-11; 8:45 am]
BILLING CODE 8025-01-P