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SBA sets $1B loan funds
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September 21, 1998: 3:03 p.m. ET
Agency revamps programs aimed at young firms, nontraditional capitalists
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NEW YORK (CNNfn) - The U.S. Small Business Administration (SBA) revealed details Monday of two streamlined small loan programs that could be worth more than $1 billion to start-up business owners and other entrepreneurs.
"SBA's small loan programs will provide many more Americans with access to the winner's circle of this new economy," President Clinton said about the SBA initiative. "By opening doors for these new small businesses, we will help build communities, one small business at a time."
The two programs -- SBALowDoc and SBAExpress -- are designed to fill a perceived need for small business loans under $150,000, making it easier and more attractive for lenders to make smaller loans with SBA backing.
The loans will be backed by the SBA and will be aimed at expanding the entrepreneurial pool, the SBA said.
"These loan programs will benefit all small businesses, but they will be especially helpful for small businesses in inner cities and rural communities, including firms owned by women, African-Americans, Hispanic Americans, Native Americans, and other minorities -- firms that make up what we call 'New Markets,' " said SBA Administrator Aida Alvarez.
The major new features of these two loan programs are:
- SBALowDoc -- the SBA will increase the loan ceiling on its LowDoc (low documentation) program from $100,000 to $150,000, assure a 36-hour turn-around on loan applications, provide systematic reconsideration of all loans that are not approved as submitted and simplify the process for participating lenders and borrowers.
- SBAExpress -- the SBA will expand its three-year-old FA$TRAK program to up to 500 new lenders under the new name SBAExpress. As with the LowDoc program, the Express loan ceiling will increase from $100,000 to $150,000 and the SBA will also assure a 36-hour turnaround on applications, push for installation of electronic application systems by April 1999, and offer a new revolving credit feature.
Both programs will offer short-term and long-term loans. The SBA will encourage lenders to use SBAExpress to provide revolving credit loans.
"These new small loan programs will play an important role in helping SBA meet its aggressive outreach goals over the next two years," Alvarez said. "By making small loans more accessible to those New Market firms that need them, we are taking a major step forward to position SBA and the nation's entire small business community for the new economy of the 21st century." 
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