WASHINGTON — To eliminate redundancies of forms used by the Small Business Administration's 7(a) loan program, consolidation may offer some relief, CUNA suggested in a comment letter to the agency.
In its Nov. 9 letter, CUNA suggested that the Form 4 (borrower's application) and Form 4-1 (lender's application for guarantee or participation) largely duplicate information lenders collect on their own forms. CUNA recommended the consolidation "with an eye toward greater reliance on the use of the date provided on lenders' forms."
"Some of our members have raised the concern that these forms largely duplicate information lenders collect on their own forms," wrote Mary Mitchell Dunn, CUNA deputy general counsel and senior vice president. "We encourage the SBA to consider how this information could be consolidated and redundancies eliminated, including whether there could be greater reliance on the use of data provided on lenders' forms."
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CUNA said it supports the SBA's efforts to improve the 7(a) loan application process including its current focus on smaller loans.
"Ensuring the agency's modifying the process in the most effective and efficient manner will entail soliciting information from lenders, which we support as long as information requests are reasonable and not burdensome to provide for either lenders or borrowers," Dunn wrote. "In the future, providing more details about the specific information to be collected would facilitate more useful comments."
In other comments, CUNA praised the agency for its new Rural Lender Advantage Program, which provides a simplified application for loans of $350,000 or less in rural communities.
"We encourage the agency to consider the extent to which the streamlined characteristics of this program could be applied to other 7(a) loans, especially those which do not exceed $350,000," CUNA wrote.
Meanwhile, 44 credit unions are currently participating in the SBA's new Patriot Express Loan initiative announced in June to support veterans and Reserve members by providing favorable guaranty and interest rate characteristics for loans up to $500,000.
Dunn said CUNA and credit unions are encouraged by the efforts under SBA Administrator Steven Preston to improve the 7(a) program.
"Such initiatives not only facilitate the ability of more small businesses to pursue their dreams but also enhance the capabilities of credit unions and other lenders to support small businesses and their communities," Dunn wrote.
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