Small Business Administration’s Community Advantage pilot program is being upgraded.
In a joint announcement today, Vice President Kamala Harris and SBA Administrator Isabel Guzman outlined major changes to the loan program initiated during the Obama-Biden administration to help improve access to SBA programs among community loan partners, including Community Development Financial Institutions (CDFIs). ), Community Development Companies (CDCs), and microcredit providers.
Designed to meet the credit, management and technical support needs of small businesses in underserved markets, the SBA’s Community Advantage pilot loan program was originally set to expire in September 2022. Following today’s announcement, the new program termination date is September 30. 2024.
Business owners applying for 7(a) working capital loans through the community agencies receive up to $350,000, an increase of $250,000. They can access up to $50,000 in unsecured loans, against $25,000. The reforms will allow lenders and other institutions to provide revolving credit, grace periods and other loan adjustments to provide more capital options to those who need it. Former restrictions that prevented individuals with criminal backgrounds from accessing these programs are also being lifted.
“America’s mission-driven lenders have been a vital partner to the SBA in securing much-needed financial assistance to underserved businesses during the Covid pandemic. By scaling up the SBA’s Community Advantage pilot program, we can build on that momentum Guzman said in a press. release.
The changes will become effective 30 days after posting this notice in the Federal Register, expected early next month, according to the SBA. Borrowers can already apply for regular 7(a) and 504 loans for up to $5 million through existing program lenders, some of which are Minority Depository Institutions (MDIs) and credit unions, institutions that tend to serve founders in underrepresented communities.
There is a complete list of all community lenders on the SBA website.
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