A U.S. Small Business Administration program to help small businesses obtain loans at more favorable terms has been extended yet again, this time through May 31.

Congress on Thursday passed an $18 billion jobless bill, which includes $80 million for the loan extension. The Senate approved the measure by a 59-38 margin, followed by the House of Representatives with a 289-112 vote. President Barack Obama signed the bill into law late Thursday night when he returned from a trip to Miami.

The extension of the Small Business Administration loan adjustments – originally created by the American Recovery and Reinvestment Act in February 2009 – allows for higher guarantee levels on SBA 7(a) loans to 90 percent. It also waives borrower fees on most 7(a) and 504 loans. The SBA's signature 7(a) loans help with most small business needs, and the 504 loans are for real estate or major capital assets. The program is intended to make a small company's chances of getting a loan better, and to reduce the cost of capital.

President Obama has called for the loan adjustments to be extended further, until September 2010, the end of the fiscal year. The breaks – first funded by $375 million in the economic stimulus bill – already have been extended three times. The most recent extension will run through April 30, by which point the SBA estimates that about $1.4 billion in new small-business lending will occur.

SBA administrator Karen Mills said of the previous extension: "Thousands of small businesses across the country have taken advantage of these Recovery loan enhancements to get the capital they need during these tough economic times.  The increased guarantee and reduced fees on SBA loans helped put more than $23 billion into the hands of small business owners and brought more than 1,100 lenders back to SBA loan programs."

Thanks to the breaks, SBA lending is up significantly this fiscal year, which began October 1. Through March 26, the number of 7(a) loans leaped 48 percent and the dollar amount of 7(a) lending rose 116 percent compared with last year. Average weekly loan approvals have climbed 86 percent compared with the weekly averages before the passage of the Recovery Act, Mills said.

The extensions have caused some grumbling: Loans funded under non-Recovery Act terms can't be cancelled and resubmitted to take advantage of the extended Recover Act provisions. And month-to-month extensions have caused the small-business lending market to experience a series of halting starts and stops. Each extension has come after funds dried up, and borrowers had to wait in line hoping a cash infusion would arrive.

Small businesses may be ill-prepared to scramble, but they must do so in order to meet timelines. After all, the 90 percent guarantee – up from the usual 75 percent – lets bankers make loans in cases they formerly would have rejected. That's key because many small businesses still struggle with the same problems that caused banks to tighten credit standards nearly two years ago.

Interested in taking advantage of the breaks? Get in line now.