Credit unions will have two more resources to tap to help small businesses start, expand and thrive in underserved communities.
The SBA has launched the Small Loan Advantage and Community Advantage initiatives. Both aim to offer a streamlined application process for the agency's 7(a) loans up to $250,000. The 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.
The Small Loan Advantage will be available to the 630 financial institutions across the country in the agency's Preferred Lender program. Under PLP, which includes most of the agency's highest volume lenders, SBA delegates the final credit decisions to lenders.
The Community Advantage will expand the points of access small business owners have for getting loans by opening SBA's 7(a) loan program to mission-focused financial institutions, such as community development financial institutions, certified development companies and non-profit micro lending intermediaries. The SBA said Community Advantage will leverage the experience these institutions already have in lending to minority, women-owned and start-up companies in economically challenged markets, along with their management and technical assistance expertise, to help make their borrowers successful.
In conjunction with the implementation of these two new Advantage loan initiatives by March 15, the agency said it will end its existing Community Express pilot loan program on April 30.
The new programs are in line with the creation of the Advisory Council on Underserved Communities, a new group announced today that will provide input, advice and recommendations on how the SBA, through its programs, can help strengthen competitiveness and sustainability for small businesses in underserved communities. Nominations are currently being accepted to serve on the council and can be e-mailed to [email protected].
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