Hearing the cries of credit unions frustrated with what some say is the cumbersome process to become an SBA lender, the agency set out to streamline the procedure in August 2008.

That summer, the SBA moved the procedure from its Washington headquarters to its district offices in all 50 states and Puerto Rico. The goal was to shrink the processing time from beginning to end, said David Donner Chait, policy associate with the SBA's Office of the Administrator.

“As a result our district offices have been successful in signing up new lenders. More than 100 [lenders] a month are coming on board or coming back to SBA after not making loans in the last three years,” Chait said.

Prior to August 2008, all credit union applications required a final decision from program headquarters in Washington. The increased level of business lending and SBA participation by credit unions required an internal change in procedures, Chait explained. Today, 254 credit unions are SBA lenders involved in a number of the agency's loan programs. The agency said active credit unions increased participation by 31% from March 2008 to March 2010. The number of loans and dollars outstanding held by credit unions increased 55% and 53% during that same period, respectively.

The SBA lender approval generally takes up to 30 days. Chait said if the applicant can provide evidence of small business lending experience, such as MBL data from call reports, the evaluation can go smoothly.

“We encourage credit union applicants to meet with SBA to discuss their interest and outline their capabilities. It's also a good way for credit unions to understand the nuances of SBA-guaranteed lending,” Chait said.

To make that happen, the local district offices have lender relations specialists who can help CUs become more familiar with all of the intricacies.

One of SBA's performance goals is to increase 7(a) active lending program participation to 3,000 by September 2011. To help meet this goal SBA is making it easier for new lenders to participate through the small/rural lender advantage. Lenders are allowed access to reduced loan documentation and underwriting assistance. The agency said it has also significantly improved its guarantee purchase process, averaging less than 30 days when a lender turns in a complete package. Chait said the SBA pays more than 95% of the requests it receives.

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