New York - Newtek Business Services, The Small Business Authority, announced the release of its SB Authority Index for March 2011. The SB Authority Index is up 0.60% from February 2011. The Prime Rate, Retail Sales and Approved SBA Loan Volume led the index increase. The other five components of the index are the Russell Microcap Index, ADP National Employment Report, New Business Formations, Estimated Small Business Default Loan Rate, and Newtek Merchant Processing Volume. We see the small business economy growing but at a slow and upward trend.

President and CEO, Barry Sloane said, "The SB Authority index continues to climb off of a very low base and is still barely above the Small Business economies high point in the fourth quarter of 2007. When we look at what factors drive the small business economy, no single factor weighs more heavily on small business growth and stability as levels of rates of interest. The cost of capital for small business has remained low for several years, which is now driven by the Federal Reserves aggressive monetary easing. This ease has several repercussions for small business that we shall discuss.

One may ask, why is the Prime Rate used as the index measure? Many small business owners borrow off of home equity, either through a Home Equity Line of credit or a second mortgage. The index of choice for most lenders in these markets is offering finance based on a spread to the Prime Rate. Another key small business financing vehicle is SBA (Small Business Administration) 7A loans, of which we anticipate 17.5 billion of guaranty to be drawn upon in this fiscal year. The significant majority of these loans are prime based."

Mr. Sloane continues, "The Fed has kept rates low thru a low fed funds rate and its quantitative easing policy of buying long term government bonds. This has caused the dollar to go lower. Increased the prices of many key commodity prices like oil, copper, corn, sugar, beef etc. Although quite stimulating in the short term these fixes have long term issues that may make it difficult for independent business owners to deal with down the road. "Helicopter Ben" Bernanke our Fed Chairmen showers the market with liquidity and inspiring economic policy in the short term.

Our SB Authority index has moved positively off of its bottom in 2008 because of lower rates driving the Russell micro cap Index, consumer spending, retail sales and exports with a cheaper dollar. As long as the Prime Rate stays at 3.25 percent we see the small business economy moving forward against the back drop of the deleveraging of the Banking industry and State Local and possible future