SBA Sought Out Credit Unions to Help Rebuild Gulf Coast, NCUA Made Appeals as CUNA Asked for More Clarity

WASHINGTON – The destructive hurricanes that tore through several states this year forced many government agencies to get creative real quick on how to rebuild homes and businesses. Among them was the SBA, which had previously come under fire from some small business owners for how slow the agency was processing and approving loans. SBA Administrator Hector Barreto had to defend the agency’s actions twice at two Congressional hearings sharing with legislators all that was being done to get money in the hands of small business owners impacted in Louisiana, Mississippi, Texas and Alabama. In response, the SBA kicked it into high gear, launching a litany of measures to speed up the loan process. One of the initiatives, the GO Loan program, rolled out on Nov. 7, allowed credit unions and banks that are Preferred Lenders and Express lenders to use their own forms and underwriting to get working capital into the hands of small businesses in the Gulf region. The loans, which are modeled after SBAExpress loans, are available up to $150,000, have an 85% guarantee, and applicants will have a decision in 24 hours or less. CUNA wanted to help but need clarification on how CUs could participate if they weren’t SBAExpress lenders. At press time, CUNA was still working with the agency on the details. Meanwhile, NCUA encouraged credit unions to partner with SBA through its “Give a Lending Hand Program.” The agency is seeking out credit unions and banks’ SBA experienced loan officers who will be hired as Special Government Employees to assist in processing disaster loans for business owners impacted by hurricanes in the Gulf region. They will review and recommend the approval or decline of the loans. In early December, the SBA appealed to lenders again through a venture with Operation HOPE, Inc. Both have joined forces to recruit 1,000 volunteer professionals from financial institutions, credit unions, and insurance companies to offer small and minority businesses in hurricane disaster-affected communities access to free financial counseling, information on economic assistance programs, and budgeting advice through one-on-one telephone counseling. The most recent figures show more than $1 billion in SBA disaster loans approved for those impacted by Hurricanes Katrina, Rita and Wilma. [email protected]