The Small Business Administration set new lending records in December, as lenders and borrowers rushed to take advantage of higher government guarantees and reduced fees on SBA loans before these breaks disappeared.

Before leaving town for Christmas, Congress extended the SBA's authority to provide these breaks until March 4. Congress, however, didn't provide any additional funding to pay for these lending incentives, and by New Year's Day, all of the $1.2 billion previously appropriated for these breaks had been used up.

Unless Congress comes up with more money for these SBA loan enhancements, these breaks are history, except for a few small businesses on an SBA waiting list that might get these loan enhancements if already-approved borrowers decide not to go through with their loans.

Republicans now control the House, and they've promised to cut spending. So the odds are against a renewal of these lending incentives, which were first created by the economic stimulus bill in early 2009.

The loan breaks boosted SBA lending, which had dropped dramatically during the financial crisis. The 90 percent guarantee on the SBA's flagship 7(a) loans - up from the usual 75 percent or 85 percent - made these loans less risky for lenders. The fee waivers on 7(a) loans and 504 loans, which are primarily used for real estate, made these programs more affordable for borrowers.

Thanks to these incentives - and anticipation of their demise - nearly 20,000 small businesses received more than $9 billion in 7(a) loans in October, November and December. That compares with $3.9 billion in 7(a) loans during the same quarter a year ago, and only $1.9 billion during this period in 2008.

More than 2,000 small businesses received $1.35 billion in 504 loans in October, November and December. That dollar volume was up 17 percent from the same quarter a year earlier.

In the week of Dec. 18-24 alone, the SBA backed nearly $2 billion in small-business loans - the highest weekly dollar volume ever recorded by the SBA.

For more information, see www.sba.gov

Community banks urged to boost small-biz loans

The Treasury Department began implementing a new program that aims to increase lending to small businesses by providing up to $30 billion in cheap capital to community banks.

The department issued terms for its Small Business Lending Fund and invited banks to submit applications for the program by March 31. Under the program, banks with assets of $10 billion or less can access capital at an initial dividend rate of 5 percent. If a bank increases its small-business lending, the dividend rate will fall to as low as 1 percent. If bank fails to increase its small-business lending, the dividend rate will increase to 7 percent or more.

The Independent Community Bankers of America praised the department for moving forward with the program, which was created by legislation that was signed into law Sept. 27.

For more information, see www.treas.gov/SBLF

Most firms think reform will hike insurance costs

Most employers expect health-care reform will increase the cost of health insurance, according to a survey conducted for the Midwest Business Group on Health and the National Business Coalition on Health.

The national survey found that 74 percent of employers expect that health-care reform will cause their health costs to increase more than would be the case if the legislation had not been enacted. Nearly two-thirds of employers surveyed have done some modeling on how health-care reform will affect their benefit costs. About 25 percent of employers expect the reform to add 2 percent to 5 percent to their health costs, and 15 percent expect increases of 6 percent to 10 percent.

Under health-care reform, businesses that employ 50 or more workers will be required to meet federal standards for insurance coverage or pay penalties to the government. Many business groups fear this minimum benefits package will be richer than many employers can afford.

"The survey results reflect employer frustration that cost containment, as their priority goal for health-care reform legislation, is not at present being realized," said Andrew Webber, president and CEO of the National Business Coalition on Health.

A separate survey conducted by Small Business Majority, however, found that health-care reform's tax credits and insurance exchanges will make small businesses more likely to offer coverage. The survey found that 33 percent of employers that don't offer insurance say they will be more likely to do so because of tax credits that partially cover the cost of insurance for businesses with fewer than 25 employees and average annual wages under $50,000. The same percentage said that insurance exchanges - online marketplaces that will be available to individuals and small businesses in 2014 - will make them more likely to offer coverage.

"These findings are very encouraging," said John Arensmeyer, CEO of Small Business Majority, which was one of the few business groups that supported reform.

"Once small-business owners learn about the tax credits and insurance exchanges, they realize these provisions will help them provide insurance to their workers, many for the first time ever," he said.

Republicans, who now control the House, have scheduled a Jan. 12 vote on repealing the health-care reform law. However, repeal is unlikely to pass the Senate and would face a certain veto by President Barack Obama.

For more information, see www.mbgh.org or www.smallbusinessmajority.org