Small Business Loans Approved in Minutes

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The United States Small Business Administration is changing the way they do business. Recently they changed the way small business loans are put in to the hands of those who need it.

With all of the government programs designed to stimulate the economy, the largest complaint from everyday citizens is that they aren’t seeing it. Banks get bailouts and virtually free money and each state gets money from the TARP program that they use to build bridges and schools as well as other programs that are designed to put people to work/  With nearly 10% of the country unemployed, these stimulus programs aren’t making a dent in the unemployment rate in most states.

Business owners have the same complaints. When a Wall Street bank finds itself unable to meet its debt obligations, the government steps in but when the local restaurant or regional retail store has creditors knocking at its door, their only recourse is bankruptcy and this makes the small business owners ask why.

There are loan programs available to small business owners but these haven’t worked either. Although banks are receiving money from the Federal Reserve at a nearly zero percent interest rate, they still aren’t lending to those who need it. More than three-quarters of small businesses that applied for a loan during the first half of 2010 received only “some” or “none” of the credit they desired, according to a New York Federal Reserve report released in October.

The government has heard this and now small business loans are easier to get. The new Small Business Administration (SBA) Loan Advantage incentive is designed to cut the paperwork involved in receiving a loan. A one page credit memo is all an SBA preferred lender has to complete and the loan will be approved in minutes. As with a normal 7(a) program, the loans are guaranteed at 85% up to $150,000 and 75% over $150,000.

In the past, banks were sometimes unwilling to make small loans because of the time and expense involved in getting customers approved. The SBA hopes that banks will now be more inclined to make these smaller loans since the loan documents have been simplified.

Next, the SBA is ramping up its efforts to get money in to the hands of minorities, women and veterans. This program, called the Community Advantage program encourages potential borrowers to get a business plan in place and work with a mentor to take the business from an idea to a thriving business in the shortest amount of time.

The SBA is taking steps to make small business loans a reality for many more people who are either looking to finance a new business or expand an existing one. There are more than 650 preferred SBA lending institutions. That list can be found on their website.