Changes to SBA Community Express Program

The Small Business Administration (SBA) is restructuring its Community Express program, effective October 1, to increase the number of eligible borrowers and funnel more lending to low-income areas.  The restructuring extends this 9 year old “pilot program with a deadline” to December 31, 2009.  The SBA Community Express loan program is designed for small businesses in disadvantaged communities to help them succeed.

            Some important changes to the Community Express program include:

• After October 1^st, anyone is eligible for the loan, while before that date only minorities, women, veterans, and those in low income areas are eligible.
• Small businesses with a principal office in a low-income HUBzone, or an area covered by the Community Reinvestment Act, will be eligible for the loans, as will any small firm seeking a loan of $25,000 or less.
• The SBA reduced the maximum interest rate lenders may charge for Community Express loans, bringing it in line with the SBA’s 7(a) program.  The new maximum rate will be prime plus 2.25% for loans with maturities of less than 7 years.  For loans with maturities of 7 years or more, the maximum rate will be prime plus 2.75%. 
• Lenders are allowed to charge an additional 2 percentage points for loans under $25,000, and an additional 1 percentage point for loans between $25,000 and $50,000.
• Lenders using the Community Express program, who are required to arrange technical assistance for borrowers, will be able to use the SBA’s online Small Business Training Network to satisfy this requirement.
• The SBA guarantees 75% – 85% of Community Express loans, and up to $250,000 can be borrowed through the Community Express Program.

Comments

[small business loans]

Most entrepreneurs need to borrow money at some point. When you’re in the market for small business financing, determining what kind of loan you can qualify for is the first step. Thanks for the info!