Biz tip of the week: SBA unlocks commercial capital

The SBA administrator has made some significant changes in the agency’s lending process. Maria Contreras-Sweet is the first community banker and SBA lender to hold this position. “As the co-founder of a community business bank in downtown Los Angeles, I saw the small business credit crunch up close. I saw the difference SBA-backed capital could make and the transformative potential of technology to help banks make good loans to historically underserved populations,” she said.

These changes will help get more capital to your small business:

• Predictive credit scoring

• — Implemented last summer, predictive credit scoring enables banks to make immediate approval decisions on smaller-dollar loans. It puts more weight on business credit than personal credit, because many entrepreneurs made personal sacrifices during the recession to keep their businesses afloat.

• Online matchmaking

• — This winter, SBA launched LINC to help entrepreneurs get a date with a lender. This tool allows small business owners to go to sba.gov and fill out a short questionnaire, which is then blasted out to its lending network. Interested lenders will reply within 48 hours to arrange a meeting.

• Going paperless

• — They’re in the process of rolling out SBA One, which will automate the lending application with an online interface that auto-populates necessary forms and allows digital signatures.

• Fee relief

• — They waived fees on loans of $150,000 and less, so small-business owners on tight budgets aren’t priced out.

The SBA has signed up hundreds of new lenders, including many community banks, credit unions and nonprofit organizations. Women and minority entrepreneurs are three to five times more likely to receive an SBA loan than a traditional bank loan, the agency says.

Get more details at http://tinyurl.com/mlpregh.