The Small Business Administration is at it again in proactively increasing SMEs’ access to capital within the U.S.
The SBA recently revealed a new online portal to connect small businesses with potential lenders, and championed its accomplishment of not needing any funds from President Obama’s 2016 budget proposal to cover lending costs.
And while the group has had to dodge congressional criticism over the way it is spending its money, the SBA has apparently moved forward with its latest initiative. In an announcement Friday (March 6) signed by New England region administrator Seth A. Goodall, the administration revealed new partnerships with credit unions across the nation to hike small business lending.
So far, the SBA said it has linked up with 250 credit unions with the goal of each approving at least 10 SME loans valued at $50,000 or less.
Reaching this goal, the SBA said, would pump $125 million into the economy. While credit unions are limited to how many business loans they can issue, reports say the initiative does not count toward that lending cap because this financing would count as small-dollar loans, which are below $150,000.
“We’re committed to making it easier for entrepreneurs to access fundamental tools and resources to start and grow new businesses,” the SBA’s announcement said. To boost the initiative, the group has revised credit criteria for small-dollar loans in an effort to streamline credit evaluations. The SBA has also removed small-dollar loan fees.
With the expanse of credit unions – the SBA said there are 6,600 federally insured credit unions that reach more than 100 million borrowers – the potential for this project could be grand.