The U.S. Small Business Administration (SBA) unveiled two new initiatives Dec. 15 to increase lending opportunities for small business owners in inner cities and underserved communities.
Under the two initiatives, known as the Small Loan Advantage and the Community Advantage, community banks will be able to offer loans up to $250,000. Those loans come with the government guarantee of 75 percent while anything under $150,000 comes with the 85 percent guarantee.
The SBA wants to use Community Development Financial Institutions to ease the process of lending to minority, women-owned and start-up companies in lower-income areas.
In addition, the SBA named Cathy Hughes, chairwoman and founder of Radio One, to chair the newly-formed Advisory Council on Undeserved Communities.
“I’m excited to be a part of this effort to strengthen the link between these entrepreneurs and the SBA’s wide variety of resources,” Hughes said in a statement. “SBA assistance played a critical role in my success, and I’m eager to do all I can to help make sure others have access to these same opportunities.”
“Over the last two years, we’ve seen lending to all small businesses tighten up, and that tightening has been even greater in traditionally underserved communities, including among minorities, women and in rural areas,” SBA Administrator Karen Mills said in a statement. “These new Advantage initiatives are aimed directly at getting more loans into these markets so these small business owners can get the capital they need to start or grow their business and create good paying jobs in local communities across the country.”
Additional information on SBA assistance: http://www.sba.gov/mostrequesteditems/index.html