Entrepreneurs facing tougher access to small business lending will soon have an easier time, thanks to two new loan programs from the U.S. Small Business Administration.
The two programs, titled the Small Loan Advantage and Community Advantage, will provide increased funding to entrepreneurs in underserved areas through 7(a) loans – the most frequently requested type of loan filed for with the SBA. The majority of these loans go toward the purchase of operational equipment, further capital or retail space.
Small Loan Advantage will provide capital to 630 institutions nationwide classified under the SBA’s Preferred Lender Program. The Community Advantage loans will be directed toward “mission-focused” financial institutions such as Certified Development Companies and other nonprofit organizations.
“These new Advantage initiatives are aimed directly at getting more loans into these markets, so these small business owners can get the capital they need to start or grow their business and create good paying jobs in local communities across the country,” said SBA administrator Karen Mills.
The programs come as good news to entrepreneurs at time when small business bankruptcies have begun to decline. In 2010, bankruptcies declined by an average of 4.4 percent in the country’s 15 largest metro regions. However, 19,884 small businesses filed for bankruptcy through September, one of the reasons for more accessible lending is needed, according to a study by Equifax.
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