By: Dennis Norman
In response to a letter from National Association of REALTORS(R) 2009 President, Charles McMillan requesting that real estate agents be eligible for SBA loans or clarification that agents are already eligible, the U.S. Small Business Administration said that real estate agents and brokers are eligible for SBA guaranteed financial assistance.
The SBA letter to NAR states:
If the applicant business is a real estate agent who is licensed to negotiate/arrange real estate sales and works for a real estate broker, that business is eligible for SBA guaranteed financial assistance. We assume that the duties involved with negotiating and arranging include showing property, listing property, filling in contracts, listing agreements and purchase contracts. Also, we assume that real estate agents generally are licensed to operate under the supervision of a real estate broker.
Real estate brokers are also eligible if broker is defined as a person who arranges the the purchase or sale of property for a buyer or seller in return for a commission. We assume brokers can help arrange for the financing of the purchase through contacts with banks, savings and loans, and mortgage bankers as well as be required to be licensed by a state to buy or sell real estate. Finally, the loan proceeds of any SBA guaranty loan request for both real estate agents and brokers may not be used to acquire real property which will be held as an investment.
The American Recovery and Reinvestment Act is supposed to make it easier and less expensive for small businesses to get SBA loans, give lenders new incentives to make more small business loans, and help unfreeze the secondary markets to boost liquidity in the credit markets.
The bill provides $730 million to SBA and makes changes to the agency’s lending and investment programs so that they can reach more small businesses that need help.
To find out more about the SBA and the help that is available to small business through the SBA, check out their website at http://www.sba.gov/index.html.