SBA Makes it Easier for Small Business Owners to Get Loans

PrintThe Small Business Administration implemented several new rules on April 21st which should make it easier for small business owners to obtain government-guaranteed loans.

Most of the changes affect  two popular programs:    7(a) loans, where banks typically provide all of the financing, and 504 loans, where  the proceeds are intended for real estate or machinery purchases and  financing is split between banks and Certified Development Companies (CDCs).  By modifying or eliminating certain requirements, the SBA believes it will expand program eligibility and  provide small businesses with improved access to capital.

Here are some of the main changes:

-elimination of the personal resources test, whereby loan applicants were required to furnish information about their personal assets and wealth;

-modified collateral requirements for 504 loans; and

-elimination of the nine month rule for project expenses related to 504 loans.

For more details about these changes, take a look at the SBA’s press release and this article in the Washington Post’s business section.

 

 

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