SBA provides lesser-known loan option

11/9/2011

As loans from conventional banks remain hard to come by for some small business owners, they must look for alternative options to obtain capital and grow their companies.

Crain's New York Business notes that SBA-approved non-bank lenders can act as a source of funding, despite the fact that they don't accept deposits.

Currently, there are 14 SBA-licensed non-bank lenders in the country. These institutions have the ability to approve loans that traditional banks may deny because they're not watched over by financial regulators. They also consider additional factors that conventional financial institutions usually don't, such as projected income, which makes getting an SBA loan a much easier task for burgeoning businesses.

The news source reports that in 2010, SBA-approved non-banks made $331.3 million in SBA loans, and have granted 23 loans totaling $15.8 million through September 2011.

Politico suggests that in order for the SBA to further improve its lending in 2012, it should increase funding to ensure resources are readily available, provide funds to improve the 7(a) loan program and extend 7(a) and 504 fee waivers on the portion of a loan that is guaranteed.