New SBA Loan Options to Support Small Businesses
Astute small business owners know about the US Small Business Administration and their offerings, including training and mentoring, information on best practices, and funding options. In addition to their regular loan programs, the SBA regularly pilots programs to explore new ways to support small businesses. The Express Bridge Loan and the Community Advantage are two such programs.
Express Bridge Loan
The EBL is designed to support small businesses in areas that have been declared a Presidential disaster. Borrowers must be able to prove that the loan is necessary to restart or keep the business open. The maximum amount you can borrow with this SBA loan is $25,000 and approved very quickly, but the application has to be submitted within six months of the disaster declaration. This bridge loan is to hold over small businesses while they apply for the more comprehensive SBA Disaster Loan or another long-term financing option. The biggest hitch to this program is to qualify for the EBL, a business must have a pre-existing relationship with an SBA lending institution.
Community Advantage Program
The goal of the Community Advantage program is to increase the number of SBA loans to small businesses in underserved markets. This SBA loan can be for up to $250,000 and also has a quicker turn-around than most SBA loans. To qualify for this loan, you should have a relationship with a mission-based community lender, such as a Community Development Corporation or a US Treasury certified Community Development Financial Institutions. The lender must also be sure that sixty percent of their SBA portfolio focuses on assistant small businesses in such underserved areas as Low-to-Moderate Income (LMI) communities, Empowerment Zones, Promise Zones, Opportunity Zones, and rural areas. Veteran-owned businesses may also count toward this requirement.
The SBA is always revising their programs and reacting to external factors that affect small businesses. The most well-known example of such an SBA loan is the Paycheck Protection Program, set up to help small businesses and nonprofits who had to close or reduce staff because of the COVID-pandemic. The best way to know when new SBA opportunities arise is two-fold. First, find out which banks in your area are SBA lenders and establish a relationship with them, even if this means opening up a small savings account to establish yourself as a customer. Second, find your local SBA representative and get on their mailing list to learn about new opportunities – whether they are nation-wide or specific to your area.