In my work with faith communities throughout the country, I often hear about what a challenge gaining access to capital can be for small business owners. That’s why the SBA is working to expand access to capital with two new initiatives: Small Loan Advantage and Community Advantage.
On December 16th SBA Deputy Administrator Marie Johns and I hosted a conference call with faith-based and community leaders to discuss how these initiatives will help SBA deepen its commitment to underserved markets. With these initiatives, we are looking to increase the number of SBA-backed loans to entrepreneurs and small businesses in traditionally underserved communities.
Small Loan Advantage will provide for a streamlined loan application process for SBA loans up to $250,000. It will be available to financial institutions in SBA’s Preferred Lender Program. With this simplified process, we are providing preferred lenders with added incentive to make lower dollar loans in underserved communities.
The Community Advantage program is a boon to mission-focused financial institutions, including Community Development Financial Institutions, Certified Development Companies and non-profit microloan intermediaries as SBA’s 7(a) program, with it government guarantees, will now be open to many of them. We expect this program will increase the number of financing options available to small business owners in underserved communities.
Ms. Johns also announced the creation of an SBA Advisory Council on Underserved Communities that will be chaired by Catherine Hughes. Ms. Hughes is the chairperson and founder of Radio One, Inc., and a former SBA borrower. The Council will consist of 20 members from across the country and over the next few weeks, SBA will be accepting nominations for members to serve on the CUC.
I’m grateful to have the opportunity to work with people like Marie Johns and Catherine Hughes, and everyone at the SBA who works on these issues. All of us at SBA, and throughout the Obama Administration, are committed to reaching underserved communities at a time when entrepreneurship and small businesses are poised to play a major role in driving economic recovery and job creation.
If you have questions or comments about this blog please send a message to partnerships (at) sba.gov.
Jerry Flavin serves as the Director of the Small Business Administration Center for Faith-Based and Neighborhood Partnerships.