SBA to streamline loan process

March 28, 2013 in

The process for small businesses to apply for loans is being streamlined.

The Small Business Administration recently announced that it plans to simplify the process for small businesses to receive loans from the government-sponsored organization. The reforms are aimed at eliminating the excessive paperwork business owners must file to apply for loans. 

One of the changes that should promote small business finance is the proposed elimination of the personal resource test. It will put an end to the complicated process that is used to calculate the amount of collateral required for certain loans. 

Other points of reform outlined by the SBA are the elimination of the nine-month rule for 504 loan programs and the revision of the rule on affiliation. 

“The changes are the latest steps to reduce paperwork burden, with our eye on the larger goal of expanding access to capital and giving entrepreneurs and small business owners the financial resources to grow and create jobs,” said SBA Administrator Karen Mills.

There have been many positive developments recently regarding small business funding. On March 12, online small business resource firm Biz2Credit reported that big banks increased the number of loans they are handing out to small businesses. There was a 35 percent increase in small business loan approval by large banks in February 2013 from the previous year.

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