Startups, newly established and growing small businesses now have a new source of financing backed by the U.S. Small Business Administration as 20 community organizations have been funded by SBA to start making loans up to $200,000 to qualifying small businesses.
Authorized under the Small Business Jobs Act of 2010, the new Intermediary Lending Pilot Program will provide direct loans up to $1 million to 20 community organizations or intermediaries in fiscal year 2011, which in turn will use those funds to help finance small businesses, mostly in underserved markets.
The U.S. Small Business Administration has approved an initial group of six community-based, mission-focused lenders to start accepting and processing Community Advantage loan applications from small business borrowers immediately, the agency announced today.
Lenders who participate in the U.S. Small Business Administration’s Preferred Lender Program can approve loans through the agency’s new Small Loan Advantage program beginning Feb. 15. At the same time, the agency will begin accepting applications from community-based, mission-focused lenders who are interested in making SBA-guaranteed loans through the new Community Advantage program.
Both the Small Loan Advantage and Community Advantage programs were announced in December as part of the agency’s efforts to increase the number of lower dollar loans being made to small businesses and entrepreneurs in underserved communities.
Every lender and lending program is different. However, there is basic documentation required for a successful loan application.
Basic documentation Information required:
Loan application. At a minimum, the loan application requires business and personal information, the amount, purpose and banking information (checking account). The purpose must be specific and supported with appropriate documentation.
Copies of the Business and Personal Income Tax Returns for past three years (must be signed.) Be aware that the lender will confirm with the IRS the accuracy of the tax return submitted.
Company financial statements for the past three years (include income statement and balance sheet.) Interim statements may be required.