The deadline for the U.S. Small Business Administration's ability to provide small business loans that are enhanced with special provisions of the American Recovery and Reinvestment Act, including a higher guarantee of SBA-backed loans and a waiver of loan fees normally paid by borrowers, has been extended to March 28.

SBA estimates the additional funding will support about $1.8 billion in small business lending.

New approvals of eligible loans with the higher guarantee and reduced fees made possible by the Recovery Act are expected to resume on March 10. Loan applications from borrowers in SBA's Recovery Loan Queue will be funded first, followed by new loan applications.

As part of the Recovery Act, SBA received $730 million, which included $375 million to increase the SBA guarantee on 7(a) loans to 90 percent and to waive borrower fees on most 7(a) and 504 loans. The funds for these programs were exhausted Nov. 23, and an additional $125 million was provided during December. Those funds were exhausted in late February.

SBA has implemented the Recovery Loan Queue twice before as part of its temporary transitions back to pre-Recovery Act lending. Eligible small businesses, in consultation with their lender, could choose to be placed in the queue for possible approval of a Recovery Act loan if funding became available from loans canceled for a variety of reasons. Currently there are 652 loan requests totaling $230 million in the Recovery Loan Queue.

This extension does not affect other SBA Recovery Act programs, including the America's Recovery Capital loan program or the agency's microloans. Recovery Act funding still remains available for both of those programs.