Eric Ness came to Tomah Thursday with an urgent message: Credit is available for small business.

Ness, district director for the federal Small Business Administration, told a group of area small business owners that his agency is taking significant steps to revive a credit market shaken by recession and weakness in the private lending industry.

Ness was invited to Tomah by state Rep. Mark Radcliffe (D-Black River Falls) and spoke to a group of about 30 people at the Western Technical College Tomah campus.

“We’re putting a lot of programs out there trying to get credit to small businesses,” Ness said. “Loans are getting done.”

The economic stimulus package passed by Congress and signed by President Barack Obama in February pumped an additional $730 million into SBA and changed several rules that make it easier to get loans.

Among the rule changes:

uTemporary suspension of loan fees: The SBA has waived fees on new SBA loans until Jan. 1. Ness estimated that would save a borrower $53,000 on a $1.6 million loan. Radcliffe said anyone serious about the loan should apply soon.

“It’s important to apply rather quickly because the waiving of the fee represents a substantial savings to the borrower,” Radcliffe said.

* Increased loan guarantees. The SBA temporarily raised its loan guarantee to 90 percent. In case of a default, the federal government assumes 90 percent of the liability, and the private lender assumes the remaining 10 percent. The federal guarantee is up from 75 or 85 percent depending on the size of the loan.

* Doubling the surety bond guarantee from $2 million to $5 million. Small business owners have said the $2 million cap made it difficult for them to win large construction contracts.

* Expanded eligibility. Small businesses are now defined as those with a net worth of under $8.5 million (up from $7.5 million) and an average net income of $3 million over a two-year period (up from $2.5 million). Ninety-eight percent of Wisconsin businesses qualify under the revised definition.

* Creation of America’s Recovery Capital program. It allows an established small business to get no-interest loans to stay afloat during a period of financial hardship. The loans of up to $35,000 are 100 percent guaranteed by SBA.

* Creation of Dealer Floor Plan Financing. The revolving line of credit allows a business to borrow against its retail inventory. Loans are available for up to $2 million.

* Expanded microloans of up to $35,000.

Ness said small businesses need a solid base of cash to expand and create jobs. He said small business is responsible for 70 percent of job creation.

“In small business, cash is king,” Ness said. “You need cash to grow your business, and you need cash to stay in business.”

Since the stimulus law went into effect, SBA has approved over 1,300 loans in Wisconsin totalling $462 million.

Any small business owner seeking a loan can contact a local bank or the SBA office in Madison at 608-441-5541.