The U.S. Small Business Administration’s Office has launched an initiative aimed to promote economic development in many rural areas throughout the US by making it easier for smaller community banks to use SBA products to finance small businesses. This new initiative pilot will start to operate in Region VIII, covering Montana, South Dakota, Colorado, Wyoming, Utah and North Dakota. If this proves successful it will expand to Regions V and VII. To find eligible lenders go to http://www.sba.gov/localresources/index.html and click on your state. Then click on the link titled “NEW! Rural Lender Advantage”.
This initiative is part of the Agency’s 7(a) loan guarantee program and is designed to encourage small community/rural lenders to partner with SBA by simplifying and streamlining the Agency’s loan application process and procedures, particularly for smaller SBA loans.
Key Features of the Initiative:
- A streamlined, simpler, and more user friendly 7(a) process for small loans ($350,000 or less)
- One page application (two sided) for very small loans with key, but limited additional information required for loans above $50,000
- SBA guarantees 85 percent of loans of $150,000 or less and 75 percent of loans greater than $150,000
- Loans centrally processed through SBA’s Standard 7(a) Loan Processing Center
- Expedited SBA processing with routine loans processed within 3-5 days
- Lenders can transmit applications via fax and eventually online
- Simplified SBA loan eligibility questionnaire to help small or occasional lenders meet SBA’s eligibility requirements
- Training on SBA program requirements from local SBA offices
