Small Business Administration, or SBA loans are offered through traditional lenders and are backed by the agency. The lender can only give these loans to borrowers that meet SBA guidelines. Eligibility is dependent on several variables including the type of business, the type of borrower, business credit score, and more. While these loans may be an option when traditional loans are not, there is a strict application and reporting process that must be navigated first.
Recently, the SBA announced plans to simplify the approval process for SBA loans under $350,000. As of July 1, 2014, underwriting is replaced with a new scoring model that produces a total Small Business Credit Score. This score is a combination of a few different factors, including personal and business credit score. In addition, the personal resource test has been eliminated.
Why the Change?
The change comes as the SBA recognizes the need to get funds in to the hands of more entrepreneurs. The simplified process is less time intensive, making it easier for lenders to work with the SBA and increasing the accessibility of the SBA loan marketplace for borrowers.
What Does This Mean for Borrowers?
As a borrower, you can find your Small Business Credit Score by going to bqual.com. Reports include consumer credit score, full credit report, and a detailed fundability report. Find out if you are prequalified from anywhere you can access the internet.
Many of the lenders in the Biz2Credit lender network offer SBA loans backed by the Small Business Administration. We can help you find the right lender to get you on the road to starting or growing your business today, whether through SBA loans, a business line of credit, cash advance, working capital or some other form of financing. Visit Biz2Credit now to find out more.