WASHINGTON – Senator Mary L. Landrieu, D-La., Chair of the Senate Committee on Small Business and Entrepreneurship, today issued the following statement after the Small Business Administration (SBA) announced two new lending initiatives for underserved communities. The “Small Loan Advantage” and “Community Advantage” programs are aimed at increasing the number of smaller 7(a) loans going to small businesses. Sen. Landrieu said:
“Since the start of the financial crisis, we have seen credit lines completely shut off. As a result, small businesses in underserved areas of the country have had the hardest time obtaining adequate credit. The two new loan initiatives announced today have the potential to open up the credit lines to these struggling small businesses by streamlining the application process and increasing the number of lenders entrepreneurs can choose from when obtaining a loan. By improving the access to credit in these areas, we would give these businesses in underserved communities the opportunity to boost our economy and create jobs.
“Furthering their commitment to increasing loans in underserved areas, the SBA’s ‘Advisory Counsel on Underserved Communities’ provides the added support these businesses need to access SBA resources and take advantage of these lending programs. I look forward to working with the Council once they are assembled to energize small businesses in the most underserved areas of America.”
The Small Loan Advantage and Community Advantage will offer a streamlined application process for SBA-guaranteed 7(a) loans up to $250,000. These loans will come with the regular 7(a) government guarantee, 85 percent for loans up to $150,000 and 75 percent for those greater than $150,000.
Small Loan Advantage encourages current SBA lenders to make lower dollar loans, which in most cases benefit underserved markets. The program will be available to the 630 financial institutions across the country in the agency’s Preferred Lender Program (PLP). With Community Advantage, the agency 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, including some Community Development Financial Institutions, Certified Development Companies and non-profit microlending intermediaries.
The Small Loan Advantage and Community Advantage will take effect March 15th and the existing Community Express pilot loan program will end April 30th.