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Maximizing the SBA Opportunity

Outsourcing can help CUs achieve SBA lending profitability more quickly and with less risk.

By Brian Carlson and Dina Kroshkin | November 08, 2019 at 09:00 AM
Small Business Administration headquarters building entrance (Image: Shutterstock).

Government-guaranteed lending is in high demand. In FY 2018, the U.S. Small Business Administration approved a total of $25.8 billion in 7(a) loans, its most popular program, according to a June 2019 SBA report. This was among the highest volume of loan approvals made in the history of the 7(a) program.

It’s easy to understand why. SBA-guaranteed loans offer lenders and borrowers many advantages not available through conventional commercial loans. SBA loans provide small businesses with much-needed capital that may be otherwise inaccessible through traditional financing. More flexible lending structures, like longer loan terms and lower down payments, can help businesses that fall outside of a lender’s normal credit guidelines maintain better cash flow and achieve sustainable borrowing ratios.

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