If you run a business and are looking for a loan of less than $350,000, things will soon get a little easier.
Starting in July, the Small Business Administration will begin streamlining its loan approval process, making it easier for businesses to get loans under $350,000. And if you’re in the market for a loan of less than $150,000, the agency will cover the fees.
“This is just a continuation of recent practices by the SBA,” says Eric Ness, district director for the SBA in Wisconsin.
The agency is also doing more to promote its smaller loans. The creation of the total score model, which combines an entrepreneur’s personal credit score with the score of his or her business, is available only for loans under $350,000.
“All you need to do is plug in the person’s name, address and Social Security number and it will tell the banker right away if you’re approved,” Ness says. “We’ve been able to do this type of loan for a while, but now more paperwork is being reduced. And we are also paying the fees on any loan less than $150,000. That’s a great opportunity.”
While the SBA doesn’t loan the money itself — it works with local lenders — it will guarantee up to 85 percent of loans worth $150,000 and up to 75 percent of loans worth than $150,000. In 2013, the SBA did 229 loans for less than $350,000 in Wisconsin. Through the end of May, it had already approved 258.