NEWSLETTER - NEWS
SBDC Participates in New SBA Loan Program
by Ken Klotz, Director of Small Business Development Center
Bradley University's Small Business Development Center has been designated as an approved "technical assistance provider" by the Small Business Administration for their newest loan program - the "Community Express" loan program. This designation will allow the SBDC to provide loan related technical assistance and complete the loan application forms on behalf of the borrower, with the goal of increasing the number of loans made to clients of the Center.
Many segments of the small business community continue to have difficulty in accessing capital from traditional lending markets. These businesses are generally newer or smaller businesses that need small size loans and equity investments, accompanied by technical assistance. They are often comprised of small businesses owned by minorities, women, and/or veterans; and businesses located in low income areas. The Community Express Program is specifically targeted to those populations.
The features of the Community Express Program include:
- $15,000 maximum loan amount
- Only four pages of paperwork needed to apply for the loan
- No Business Plan or previous year tax returns must be attached
- Seven years to repay, with no prepayment penalty
- Maximum interest rate is prime rate +4.99%
- Loan proceeds can be used for any legitimate business purpose
- A relaxed credit scoring system instead of the usual "FICO" credit scoring
- Applicant must receive technical assistance adivce from an approved provider
- 15-20 day approval process, with approximately 60% of loans approved
- Participating bank receives an SBA guaranty of 85% of loan amount
The requirement that applicants receive technical assistance or advice prior to applying is designed to improve a company's chances of success. The Bradley SBDC is excited to participate because this loan program fills a "lending gap" - small loans to under-served markets. The streamlined and expedited loan processing and approval procedures will make it much easier for clients to obtain needed funds for startup or other purposes. For more information, call the SBDC at (309) 677-2992.