NEW YORK (CNNMoney.com) -- The lending market for Main Street remains pretty jammed up, but one segment of the credit landscape is recovering thanks to stimulus efforts.
The Small Business Administration's flagship lending program backed twice as many loans in the past three months as it did in the year ago period.
In the SBA's second fiscal quarter, which ended Wednesday, the government's 7(a) lending program processed 16,558 loans. That is more than double the 8,205 loans it backed in the first three months of 2009, according to preliminary data the agency released Thursday.
In total, the SBA 7(a) program lent out $3.7 billion, more than double the $1.6 billion processed in the year-earlier quarter.
"What we have been able to do from a period just over a year ago to the point we are at now is very significant," said Jonathan Swain, SBA spokesman. "These are dollars that are going in the hand of small businesses that are not only saving jobs but creating jobs."
President Obama said in his State of the Union address that job creation "must be our No. 1 focus in 2010." And getting money into the hands of small-business owners has been a top priority because these firms have created 65% of America's new jobs over the past 15 years, according to government estimates.
A stimulus success story: As part of the Recovery Act passed in February 2009, a $375 million funding pool was set aside to temporarily eliminate fees for SBA loans and increase the portion of each loan that the government guarantees, up to 90%.
A government-backed loan reduces the risk for the lender because if the small business borrower defaults, the government eats the guaranteed portion of the loan.
The new terms have been very popular with both lenders and borrowers. In fact, the SBA has run out funding three times: in November, then again in February and again very recently at the end of March. Last week, President Obama signed legislation that appropriated another $40 million for the to take the program through April.
Each time the funding for the improved loans expired, volume plunged in the following week, when only standard 7(a) loans were available. For example, in the week ended Feb. 26, the SBA approved $272 million worth of loans, but the following week, the SBA approved just $25.6 million worth of 7(a) loans.
The Recovery Act loan-enhancement provisions have already supported more than $24 billion in loans to small businesses, and there is nearly unanimous support for the program. In light of that, Swain says the SBA is anxious for Congress to appropriate long-term funding for the program rather reauthorizing money one month at a time.
"We believe -- as the President has called for several times -- that we need a longer-term extension and we believe these stops and starts to the program have a detrimental effect on the program," said Swain.
The National Small Business Association and the Independent Community Bankers of America have rallied behind the call for funding through the end of 2010.
Still not out of the woods: SBA-backed loans represent only a small fraction of small business lending overall, but these loans are closely monitored as an indicator of banks' willingness to lend to Main Street companies.
Banks have been hesitant to lend to small businesses, unwilling to take on any risk during the downturn, while small businesses themselves have been holding off on taking on more debt.
One third of small business owners do not feel confident that they can get access to the capital they need to grow, according to a survey from American Express OPEN Small Business Monitor released last week.
Less than one in five small businesses are getting the capital they need to run their business from a bank loan, according to the survey from American Express.
As more traditional lines of credit dry up, one third of small business owners have turned to their personal savings to run their company. And 42% of business owners depend on plastic - either business or personal - to run their business. 
How does a florist sell more in this economy? We changed our business to designing weddings and events only, as the everyday flowers are not selling. We had to throw out too much product at the end of the week -- flowers are perishable! More
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