December 29, 2010
According to CNNMoney.com’s Catherine Clifford, the Small Business Administration announced two new lending initiatives for small businesses. The focus of the loans is to make modest loans under $250,000 available to small businesses quickly and efficiently.
Applications for the loans are two pages long and can be approved in anywhere from “minutes” to 10 days, according to the SBA. The idea is that this increased access to credit should help spur firms to grow and hire, giving the economy a boost.
“Many entrepreneurs and small business owners across the country have enormous potential to drive economic growth and create good-paying jobs in their local communities, but too often they face barriers in fulfilling that potential,” said Catherine Hughes, chairperson of the SBA’s new Advisory Council on Underserved Communities, in a written statement.
The SBA’s new Small Loan Advantage incentive decreases the paperwork burden that small business owners previously came across. Larger banks that are already considered “preferred” lenders can make loans through its flagship 7(a) lending program up to $250,000, and get them approved quickly by submitting a single-page credit memo, according to Jonathan Swain, assistant administrator for the SBA.
Loans submitted electronically “will be approved in minutes,” according to the SBA. Other applications will be approved within one business day.
Some 630 banks are preferred lenders and have the authority to approve loans independently. As with a normal 7(a) program, the loans are guaranteed at 85% up to $150,000 and 75% over $150,000.
To read Clifford’s complete article go to: New small business loans approved in ‘minutes’