| Your Online Chiropractic CommunityMay 15, 2008 — The U.S. Small Business Administration (SBA) has extended to Region VII an initiative aimed at fostering economic development in America’s rural areas by making it easier for smaller community banks and credit unions to use SBA loan products to finance small businesses.
Small/Rural Lender Advantage is part of the agency’s 7(a) loan program and encourages smaller and/or rural lenders (lenders making 20 or fewer SBA loans a year) to offer SBA loans by streamlining the ’ loan application and approval processes. The pilot program was initiated and tested in SBA’s Region VIII (North Dakota, South Dakota, Colorado, Wyoming, Utah and Montana) in January. Following enhancements to further streamline it, SBA is now extending the initiative to Region VII, which covers Kansas, Iowa, Nebraska and Missouri. SBA expects to expand the initiative nationwide by the end of the fiscal year.
The key features of Small/Rural Lender Advantage include:
• A shorter, simplified application for loans of $350,000 or less;
• An expedited SBA loan processing time of 3-5 days for routine loans;
• Only limited, key financial documentation;
• An SBA guaranty of 85 percent available for loans of $150,000 or less; 75 percent if the loan is larger; and
• Faxed or e-mailed loan applications;
• A simplified loan eligibility questionnaire to help small or occasional SBA lenders understand SBA’s eligibility criteria; and
• SBA specialized assistance to small/rural lenders on complex eligibility issues.
This new service is intended to increase SBA’s market penetration with smaller lenders and in rural areas. Small businesses account for two-thirds of all rural jobs and comprise more than 90 percent of all rural establishments. However, the number of banks nationwide taking advantage of SBA loan programs has declined by almost 400 over the past two years. By streamlining the process and reducing the paperwork, SBA is intent on winning them back.
Source: U.S. Small Business Association, www.sba.gov
