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By Microsoft Office Live Small Business Blog:It’s certainly not news anymore that credit is tight for small-business owners. But relief may be in sight, The Washington Post reports, thanks to two new initiatives.

First, the SBA has announced it will give banks that provide SBA loans greater freedom in setting interest rates. It is also suggesting that banks allow borrowers more time to make payments, and is encouraging smaller and rural lenders to make SBA loans.

Compared to the prior year, loan volumes for the SBA’s biggest loan program —the 7(a) loan program — dropped 30 percent for the year ended in October 2008.

Second, the Federal Reserve recently announced a $200 billion plan to increase lending to consumers, including SBA loans. This is scheduled to begin in February.

Combined, the two efforts have led to “cautious optimism” that the small-business lending markets, which are nearly frozen, will begin moving again, said Rep. Nydia Velazquez, D-N.Y., chairwoman of the House Small Business Committee.

Here’s what the two new initiatives look like:

Two new initiatives are in the works, intended to offer small businesses some breathing room.

The first comes from the SBA, which has given banks offering SBA loans some leeway in setting interest rates, a rather technical adjustment that is expected to increase lending. The agency has also encouraged banks to give customers more time to make payments and is reaching out to more rural and smaller lenders to encourage more financial institutions to make SBA loans. Though, most banks are looking for higher credit scores when it comes to small business loans these days. In the past 625/630 was an acceptable score, but we’re kind of moved up and are looking more at 650 while some lenders are cutting off at 700

Also recently, as part of an effort to get credit flowing again, the Federal Reserve said that it was creating a $200 billion plan to increase consumer lending, including small-business loans partially guaranteed by the Small Business Administration. The lending is scheduled to begin in February.