The ‘Small Loan Advantage’ program will begin on Feb 15. This is a new initiative of the SBA for lenders who participate in the U.S. Small Business Administration’s Preferred Lender Program. Applications will also be accepted from community based, mission focused lenders to enable them make SBA guaranteed loans via the new Community Advantage Program.
The ‘small loan advantage’ and ‘community advantage program’ have been announced in December. These are part of the agency’s effort to increase lower dollar loans that is being made to underserved communities. SBA administrator, Karen Mills says, “Businesses in underserved communities, including minority and women-owned as well as businesses in rural areas, have been among the hardest hit by the recent economic downturn.” These programs will now make microloans for women available and will provide critical support to enable businesses and entrepreneurs get the finance to start and grow.
Small Loan Advantage and Community Advantage function on an “Advantage” platform. This makes it possible to streamline application process of SBA-guaranteed 7(a) loans ranging up-to $250,000. Now it is possible for all 610 financial institutions listed in SBA’s Preferred Lender Program (PLP) to get loans approved by using the new Small Loan Advantage process. This is gong to start from Feb. 15 along with acceptance of applications from financial institutions who are interested in becoming Community Advantage Lenders.
Importance of lower-dollar loans for the growth of underserved communities got highlighted in the SBA and U.S. Department of Commerce studies. The new loan initiatives are meant to increase lower dollar SBA 7(a) loans that go to small businesses in underserved communities.
This article was submitted by Rohit Arora, co-founder of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to