SBA Announces New Initiatives Aimed at Increasing Lending in Underserved Communities
Small Loan Advantage will be available to the 630 financial institutions across the country in the agency’s Preferred Lender Program (PLP). Under PLP, which includes most of the agency’s highest volume lenders, SBA delegates the final credit decisions to lenders.
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 Community Development Financial Institutions, Certified Development Companies and non-profit microlending intermediaries. Community Advantage will leverage the experience these institutions already have in lending to minority, women-owned and start-up companies in economically challenged markets, along with their management and technical assistance expertise, to help make their borrowers successful.
“These two new loan initiatives tackle a couple of factors we know exist when it comes to the challenges small business owners face,” Mills said. “First, to add more incentive for lower-dollar loans in these communities, we are providing a streamlined process for lenders along with the regular 7(a) government guarantee. Second, we are taking steps that will increase the number of places small business owners in underserved communities can go to get loans. And also, with Community Advantage, we are making sure that the additional assistance some borrowers may need through counseling and technical assistance will be available.”
Mills added that the new loan initiatives are in line with the agency’s core mission of supporting small business growth and job creation, and goals of the new Advisory Council on Underserved Communities, announced today. The Council will provide input, advice and recommendations on how SBA through its programs can help strengthen competiveness and sustainability for small businesses in underserved communities.
“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 Hughes, who will chair the council. “I’m excited to be a part of this effort to strengthen the link between these entrepreneurs and the SBA’s wide variety of resources. SBA assistance played a critical role in my success, and I’m eager to do all I can to help make sure others have access to these same opportunities.”