Mark Ruddeforth saved about $7,500 in initiation fees on a $343,000 U.S. Small Business Administration-backed loan for his Rapid City area business, Horse Creek Inn.
Receiving approval of the loan made Ruddeforth one of the first business owners in South Dakota to benefit from the recently passed Small Business Jobs Act of 2010, which extends and enhances certain provisions in the American Recovery and Reinvestment Act.
Signed by President Barack Obama in late September, the act affected SBA commercial lending for the 504 loan by raising the maximum net worth requirement for a business to qualify from $8.5 million to $15 million; increasing the maximum loan amount from $2 million to $5 million; and charging the bulk of the loan initiation fees to the government, according to Fran White, SBA 504 loan officer for western South Dakota.
The act is expected to benefit a larger group of small businesses.
“I’m already working on four loans that I couldn’t have been working on three weeks ago,” said White, who works with Black Hills Community Economic Development in Rapid City [Holly Meyer, "Local Business Owner Benefits from Stimulus Loan Program," Rapid City Journal, 2010.10.13].
President signs the bill two weeks ago, and already it's saving South Dakota businesses money. Who says government can't act fast to help the economy?
Ah, but what good is a measly $7500 in savings?
“Every little bit helps,” Ruddeforth said. “That’s 3 percent of gross revenue that is back in your pocket that can go back into the business.”
The saved and borrowed money will help with renovations to the property, including cabins and the restaurant dining room. Ruddeforth also added two full-time positions to his already eight-person full-time and part-time staff [Meyer, 2010.10.13].
Added two full-time positions. Added.
Ruddeforth also notes that this loan might not have happened without the stimulus, since commercial lenders are still balking at shaking loose funds. When the private sector can't keep the economy going, we step in as government to fill the gap.
Congresswoman Stephanie Herseth Sandlin and Senator Tim Johnson supported this legislation. Senator John Thune did not. Neither did Rep. John Bohener or anyone else Kristi Noem would vote for for Speaker.
I told you, Kristi, and so did Stephanie: the stimulus is working.