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SMALL BUSINESS : Small Business Loans : Obama's proposed SBA loan changes will help few small businessesThe Obama Administration recently proposed changes to the Small Business Administration's ( SBA ) loan guarantee programs to help small business owners whose access to credit has been reduced as a by-product of the financial crisis. According to a Feb. 5 White House press release about the plans, "The President is proposing to temporarily increase the maximum SBA Express loan size to $1 million" and "to temporarily allow for the refinancing of owner-occupied commercial real estate (CRE) loans under the SBA's 504 program." In the same release, SBA Administrator Karen Mills explains that "more small business owners will have quicker access to…capital to help restock inventories and support larger revenue sales" and "the ability to refinance into SBA's 504 loan will give them the chance to lock in long-term, stable financing." However well intentioned these proposals might be, I don't think they will help the typical small business because SBA backed loans aren't an important source of financing for small businesses. For instance, the proposed change to the "504 loan program" won't make much difference because few small businesses have commercial mortgages coming due in the near future. According to Barlow Research's most recent quarterly survey of several hundred companies whose sales volumes range from $100,000 to $10 million, commercial real estate mortgages were held in the fourth quarter of 2009 by only 21 percent of businesses with $100,000 to $499,999 in sales and 17 percent of businesses with $500,000 to $999,999 in sales. Moreover, only some of these mortgages will come due in the near future. Nor will raising the limit on "SBA Express loans" help many small businesses because so few companies receive them. According to the National Association of Government Guaranteed Lenders, banks made 44,220 SBA 7(a) loans in 2009. Given the number of businesses in operation last year, this means that SBA 7(a) loans went to less than 1% of active small businesses with employees. Moreover, in a 2007 report to Congress, the Federal Reserve explained that 7(a) loans account for 90% of all SBA loans, making the number of candidates for the higher limit on SBA Express loans a tiny sliver among the small business population. Another problem with raising the limit on SBA loans as a response to small business credit problems is that the recipients of SBA loans are "atypical businesses". According to a 2007 General Accounting Office report, SBA loan recipients are much more likely to be startup businesses--defined by the SBA as less than 2 years old—than more established businesses, which tend to receive conventional loans. SBA loan recipients also tend to be larger. The Barlow data shows that businesses with sales from $500,000 to $999,000 are twice as likely as businesses with sales from $100,000 to $499,999 to have received one. Finally, businesses owned by under-represented groups ( women and minorities ) tend to get a disproportionate share of 7(a) and 504 program loans, receiving loans at almost 3 times the rate of non-minority businesses, according to the GAO report. MORE: http://www.businessweek.com/smallbiz/content/feb2010/sb20100218_422918.htm Opening a Small BusinessAspiring entrepreneurs are fairly excited when they make the decision to open a small business. Sharing this news with friends and family usually generates a response referring to...Starting a Small Business IdeaYou have thought out an angle for starting a small business idea that is going to revolutionize the industry. Are you willing...Good Small Business PracticesGood small business practices require good business etiquette. 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