If you’ve ever lived on a farm or in some of our (drier) Western states you might be familiar with “good rain” and “bad rain.”  Good rain is slow steady rain that can be deeply absorbed into the soil allowing roots to spread and grow.  Bad rain is the rain that causes flash floods, washes away good things and dumps pollutants into streams and rivers.  

What we’ve just lived through in both commercial and residential lending was a prolonged period of bad rain.  (I know because being in banking I had a front row seat for the carnage).  The bad rain was caused by a flash flood of easy money and irresponsibility that has unfortunately put a hurtin’ on our country that we haven’t seen in generations.

What the economy needs now is a long season of good rain in the form of attractive business loans for America’s small and mid-sized businesses…and the SBA is trying to do their part.  The Economic Stimulus and the American Recovery and Reinvestment Act have tweaked some of the SBA’s programs for the better in the hopes that it will jumpstart some business activity. 

Now, no one will argue that the Small Business Administration always does everything right, but the SBA does have numerous programs designed to help smaller companies get to the next level and the SBA 504 is one that deserves (a lot) more attention.  It is not your typical SBA loan and it isn’t perfect – no loan is – but it has significant benefits when compared to conventional commercial loans…and it has the potential to make “good rain.”

To be continued…