As small business owners tried to figure out their business cash options during the recession, unfortunately small business loans from banks were not at the top of their list. Not only were the lending criteria exceedingly stringent, but it could take months to process the paperwork only to find out they had been denied. Even though the Small Business Administration (SBA) was in the business to make loans to these business, the paperwork criteria was so onerous even the banks wanted little to do with lending money through SBA-backed loans. Now, the SBA has unveiled a Small Loan Advantage program to help reduce the paperwork and speed up the process significantly that is scheduled to be unveiled March 15, 2011.

Get Money into Small Business Hands

During the growing recovery, it is critical for the SBA to get money into the hands of small business to help drive the economy forward. The new program will speed up the process for loans that are less than $250,000. No longer will small business owners have to wait months to find out if they even are approved. The new guidelines offer an approval within minutes, in some cases where the application is filed electronically, and up to as little 1 to 10 business days. However, that’s just the start of the new streamlined process. The application process is also much easier for small business owners to complete, being only two pages long.

No More Excuses

Banks have been faulted for failing to provide funds for small business, a crucial element of business growth in the United States. The majority of business hiring does occur through small business and the lack of lending has been cited as a reason for the lag in the recovery in unemployment numbers. Without the needed funds, and with idea when credit would loosen, businesses that were seeing cash flow shortages had no other choice than to layoff workers. However, banks were increasingly citing higher risks as a reason not to lend to small business, due to more people defaulting on loans. The new program not only provides assurance to business owners that they can get credit quickly, when needed, but also guarantees the loans so that banks will not have any more excuses not to lend.

Loan Terms

Loan terms may vary with the lender within the program, but typically the loans are structured similar to the existing 7(a) small business lending program. The loans will be guaranteed by the SBA, with loans that are in the amount less than $150,000 being guaranteed at 85 percent. Loans that are between $150,000 and $250,000 will be guaranteed at 75 percent. There are 630 banks in the United States who are authorized to make these types of small business loans. Since the application process is online, one only needs to locate a suitable lender and start the process by submitting a loan application online. As long as your business qualifies as a small business and you meet the lending criteria, this can be a very fast way to obtain funds in 2011.