Small businesses get a nearly $1-billion boost from U.S.

Nearly 2,000 loans worth $970 million have been approved for small-business owners across the nation, the Small Business Administration said Tuesday.

The loans had been held up for months as Congress bickered over the best way to stimulate the troubled small-business sector. About 10% of those loans, worth $201 million, are for companies in California.

SBA officials scrambled to approve the loans just days after President Obama signed a bill allowing the agency to waive some fees to borrowers and to increase the federal guarantee that backs loans made through the SBA programs.

By the end of the year, the agency expects to approve $14 billion worth of loans through the new legislation.

“It will do a lot of good,” said SBA spokesman Jonathan Swain.

The agency expects to make thousands more loans under the program, he said.

The loans were welcomed by businesses and bankers alike, who said that it has been particularly difficult to make loans to small businesses during the credit crunch that has accompanied the turmoil in the economy.

In February 2009, the SBA began offering incentives to help banks and other lenders make loans to small businesses with less risk, including guaranteeing some loans for 90% of their value and waiving fees that can amount to tens of thousands of dollars.

The program was a bright spot in an otherwise dismal landscape for small-business lending, but it repeatedly ran out of cash.

The last time was in May, and the bid to allocate more money for the loans got caught in last summer’s clashes between Democrats and Republicans in the Senate.

The money was finally set aside last month, as part of a broader package of measures meant to help small businesses. The package also included tax breaks and a $30-billion fund to spur lending by community banks to small businesses.

sharon.bernstein@latimes.com