SBA launches new Community Advantage Initiative loan program

[ProSense]

WH Urban Affairs Newsletter (December)

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NEW SBA Community Advantage Initiative Opens 7(a) Loan Program To CDFIs - Deadline March 15: In an effort to expand access to capital for small businesses and entrepreneurs in underserved communities across the nation, the U.S. Small Business Administration (SBA) has announced the creation of a new loan initiative named Community Advantage. This new program will increase the number of lower-dollar loans into these underserved communities by allowing Community Development Financial Institutions (CDFIs), and other mission-focused lenders, to originate SBA 7(a) loans up to $250,000.

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SBA Press Release

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With Community Advantage, the agency will expand the points of access small business owners have for getting loans by opening SBA’s 7(a) loan program to “mission-focused” financial institutions, including Community Development Financial Institutions, Certified Development Companies and non-profit microlending intermediaries. Community Advantage will leverage the experience these institutions already have in lending to minority, women-owned and start-up companies in economically challenged markets, along with their management and technical assistance expertise, to help make their borrowers successful.

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[pipoman]

1. It would be good for people with promise and a promising idea

to be able to get funding to realize their dreams, on one hand. On the other, throwing money at depressed areas is really no different than the changes in mortgage law in the 1990's which encouraged sub-prime loans, leading only to default and harnessing unbearable debt to people without the ability to repay...we all know how that worked out.

[ProSense]

2. Valid point, but

the alternative can't be "why bother," which is how too many people view programs targeted to these communities. Also, this coincides with a larger effort to uplift these areas.