LEWISTON — Efforts by Sen. Olympia Snowe, R-Maine, to expand lending to small businesses got a boost last week when President Obama announced the Small Business Administration would incorporate some of her proposals as part of its new lending initiatives. In Maine, small business leaders and bankers welcomed the moves.

Snowe, the top Republican and former chair of the Senate Committee on Small Business and Entrepreneurship, had introduced legislation that would have increased the caps on SBA loans to $5 million in most cases. Currently similar SBA loan maximums range from $1.5 million for most projects to $4 million for small manufacturers. Snowe’s legislation also called for increasing microloans from $35,000 to $50,000. The caps have not been increased in 10 years and require congressional approval.

Obama announced support for both proposals during a speech in Maryland last Wednesday.

“These larger loans will help more small business owners and franchisees grow,” he said.

Increased capital will also be made available to community banks via the Troubled Asset Relief Program, the $700 billion bank rescue package passed by Congress nearly a year ago.

“Any and all efforts to get money into the hands of small business owners is positive for job growth and the economy,” said David Clough, state director for the National Federation of Independent Business. “I hear stories from businesses having difficulty getting credit. It is a problem and clearly if businesses cannot get credit they can’t create the jobs we need.”

Clough said Obama indicated in his speech that research shows most of the future job generation expected as the economy recovers is going to come from small business.

Jim Delamater, president and chief executive officer of Northeast Bank in Lewiston, said small business lending at his bank is booming and there’s no shortage of credit.

“There’s plenty of capital out there, plenty of money to lend, it’s just a matter of you have to demonstrate you have the ability to pay it back,” he said, adding that his bank has not changed its lending practices from before the banking crisis.

“We are using the government programs when applicable because they are free; as I tell many customers, it’s in your best interest to take advantage of some of these guarantee programs because it allows the bank to price the loan a little lower and improve your rate of return,” Delamater said.

Data shows the use of SBA programs has grown in Maine in 2009 compared to 2008, unlike many other states, according to Jeanne Hulit, the SBA’s New England regional administrator.

“So that’s a good story,” she said, adding that provisions to increase the percentage of SBA loan guarantees to 90 percent and eliminate fees to borrowers included in February’s economic stimulus package also aided borrowing in Maine and elsewhere.

“That jump-started the SBA lending again and the weekly SBA loan volume today compared with the weeks prior to the recovery act has increased 230 percent,” Hulit said.

Hulit, who used to be a commercial lender at Citizen’s Bank in Portland, serves under top SBA official Karen Gordon Mills, another Mainer.

Clough of the NFIB said he encourages small business owners to explore the SBA lending programs, but said they only play a small role in overall lending.

“Loan assistance through the SBA is a small part of the overall credit activity of the small business community,” he said. “The vast majority of small business financing comes directly from banks without federal or state loan participation.”

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