SBA Opens Up Loan Approval Period for Underserved
Beginning Feb. 15, credit unions and other lenders in the SBA's preferred lender program will be able to approve the agency's new loans to aid underserved communities.
The Small Loan Advantage program, announced in December, offers what the SBA describes as a streamlined application process for 7(a) loans up to $250,000. Advantage loans will come with the regular 7(a) government guarantee, 85% for loans up to $150,000 and 75% for those greater than $150,000.
Any of the 610 financial institutions in the SBA's Preferred Lender Program can approve loans using the new Small Loan Advantage process. Under PLP, which includes most of the agency's highest volume lenders, SBA delegates the final credit decisions to these lenders, the SBA said.
Additionally, on Feb. 15, the agency will begin accepting applications from financial institutions that are interested in becoming Community Advantage lenders. The pilot initiative is aimed at increasing the number of 7(a) lenders who reach underserved communities, targeting community-based, mission-focused financial institutions which were previously not able to offer SBA loans. Community-based organizations interested in becoming Community Advantage lenders should contact the closest SBA district office.
"Businesses in underserved communities, including minority and women-owned as well as businesses in rural areas, have been among the hardest hit by the recent economic downturn," said SBA Administrator Karen Mills. "These two new Advantage initiatives can provide critical support to help these businesses and entrepreneurs get much needed financing to start and grow, which will translate into more jobs in these communities."