The U.S. Small Business Administration announced it is streamlining the process of getting loans and adding new fraud reviews on those loans.
Eligibility determination for loans will now happen through SBA instead of falling to lenders. SBA will also use data analytics, artificial intelligence and other tools to conduct fraud reviews on all loans. These new guidelines will go into affect Aug. 1.
“The ongoing modernization of SBA’s loan programs will help ensure more borrowers can get funded through a broader network of lenders so they can help build a strengthened American economy that innovates, manufactures and provides the products and services that make our lives better across Main Street," said Isabella Casillas Guzman, administrator for SBA.
Bryson Patterson is deputy district director of the SBA South Dakota office. He said these changes will also make it easier for buyers to only purchase part of a business
“The big issue we see with young people trying to purchase a business is they don’t necessarily have the cash, whether that’s 20% or 10% down, to make the payment to buy the whole business, so it gives them the option to buy a portion of the business," he said.
The changes will also expedite the process for getting small loans.
For those looking to sell a business soon, Patterson recommends getting in touch with a business counseling.
"One of the the things SBA provides is free business counseling through the small business development centers and the women's business centers," he said. "So it's important to get your business in order so that someone's going to want to buy it."
This announcement is part of recent efforts from the Biden Administration to provide more opportunities for small businesses, especially in underserved communities. Earlier in May, the administration approved new rules to allow for more equitable capital for small businesses.
