Helping banks get to “yes” on small business loans for women entrepreneurs has never been more important to America’s economic health then it is right now. That’s because smaller firms have driven our recovery, both nationally and locally. Small businesses are creating nearly 2 out of every 3 private-sector jobs. And, to accomplish all of this, they need capital. Capital to invest in new equipment, new buildings and to meet a growing payroll.
That’s why we’re encouraging banks to join our lending network and increase their lending activity to small business owners especially women and minority-owned firms. We’ve recently rolled out a credit scoring model for SBA small dollar loans of $350,000 or less, combining personal and business credit scores to streamline the lending process. With this model, we are eliminating the requirement for banks to submit cash flow analysis on loans of $350,000 or less, cutting time and the cost of applying for a loan.
This model helps lenders generate more loans and ignite more economic activity. By establishing a quicker, cheaper, and consistent loan process model, existing lenders can do more small-dollar lending. This will inevitably support the growth of small businesses, especially women and minority-owned small businesses because it will expedite access to capital. Additionally, this credit scoring model is further enhanced by the well-known FICO Small Business Scoring Service Product, therefore both lenders and small businesses win.
Approval of smaller loans is a vital part of our promise of equal opportunity in America. A study by the Urban Institute found that women and minorities are three to five times more likely to be approved for an SBA-backed loan than a traditional bank loan. In other words, if the SBA doesn’t get capital to these entrepreneurs, often no one will.
Therefore, I call on our local lenders to work with us in Region 10, to quickly advance loans and expand capital access by using our quick credit scoring model for small dollar loans. Small businesses will benefit and that means our economy will benefit.
For further information, please contact the Seattle District Office at 206-553-7310 or visit us at www.sba.gov/for-lenders.