SBA expands loan deals in WNY

Sep 03, 2008 (The Buffalo News - McClatchy-Tribune News Service via COMTEX) -- SBCO | Quote | Chart | News | PowerRating -- Sep. 3--The U. S. Small Business Administration has expanded to Western New York an initiative designed to make it easier for small community banks and credit unions to finance small businesses using SBA loan guarantees.

The federal agency's Small/Rural Lender Advantage, part of the flagship 7(a) loan guarantee program, offers streamlined loan application and approval processes for lenders that make 20 or fewer SBA loans every year.

The goal is to encourage more participation by those small institutions, and in turn more loans to small businesses, by making the agency's programs easier to use. The number of banks nationwide using SBA loan programs has fallen by almost 400 over the past two years, so the agency wants to get them back.

"Small community-based banks play a major role in financing small businesses throughout America, particularly rural America," said SBA acting administrator Sandy K. Baruah in a press release. "These businesses often depend on support from their local banks."

The Advantage effort includes a shorter, simplified application for loans of $350,000 or less and the ability to send it by fax or e-mail. It also requires less financial documentation and features a faster processing time of three to five days for routine loans. And loans will receive an 85 percent government guarantee for up to $150,000, and 75 percent for larger loans.

The agency also provides a simplified loan questionnaire to help smaller lenders understand and determine a borrower's eligibility, and provides specialized assistance on complex questions.

The initiative was first launched and tested in January. It's now going nationwide.

jepstein@buffnews.com

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