The Small Business Administration is streamlining its loan approval process for small business owners.
SBA Administrator Maria Contreras-Sweet made the announcement Tuesday while speaking at the Center for American Progress. She said a new lending initiative called SBA One will bring documents and forms online, and business owners will be able to provide electronic signatures.
SBA One is expected to speed up the application process. And according to Contreras-Sweet, “Say goodbye to fax machines and mountains of paperwork.”
She says the changes will help save banks hours of preparation time and thousands of dollars processing 7A loan applications, the SBA’s core product. The 7A loans can be used to pay operational expenses or accounts payable, or purchase inventory, equipment and real estate.
In combination with SBA credit scoring, Contreras-Sweet says that SBA One will hopefully lead more banks to partner with the administration.
The credit scoring model raises some concerns. A spokesperson for the National Small Business Association says, “It could cut out some small-business owners from getting loans, who would have been able to if there were more qualifiers in the underwriting process.”
They say it will particularly affect newer business owners or startup entrepreneurs without a solid credit history.