SBA Rolls out New Loans
(Businessweek) — Small business owners have long complained about the red tape, long waits, and prohibitive collateral requirements of Small Business Administration-guaranteed loans. This spring the agency will introduce two new SBA loan programs that will funnel capital to underserved entrepreneurs directly through nonprofit microfinance organizations, says Grady Hedgespeth, director of the SBA’s Office of Financial Assistance in Washington, D.C. He spoke recently to Smart Answerscolumnist Karen E. Klein about the two new loans, as well as the brand-new 504 commercial mortgage refinance program and how they work. Edited excerpts of their conversation follow.
Karen E. Klein: What new loan programs is the SBA adding to its portfolio for 2011?
Grady Hedgespeth: The most exciting are our Community Advantage and Small Loan Advantage programs. They are a simpler and easier way for lenders to make smaller-dollar loans and get a full SBA guarantee of up to 85 percent.