SBA to Test Web Loan Guarantee System
American Banker (08/21/00) Vol. 5, No. 17 p.3; Canning, Eileen

In September, the Small Business Administration (SBA) will begin a pilot test for an online loan processing system, which if successful, will speed up the process while reducing costs and paperwork. The test program will be done with the cooperation of about 80 volunteer lenders. It will allow lender applications to be submitted over the Internet and when approved, the computer-based system will help the SBA to keep better track of the loans. In addition, SBA is planning to begin accepting digital signatures, which will also cut down on approval time. Since 1990, SBA has almost tripled its loan portfolio, which is currently over $50 billion. It hopes that the electronic issuing of loan guarantees will expand its volume even more. In other developments, following the successful testing of its community express program, SBA plans to expand the program to include 500 of the lenders participating in its "preferred lenders program." The program relies on the National Community Reinvestment Coalition for technical support and to introduce lenders to qualified borrowers. Through the program, lenders are guaranteed as much as 80 percent of loans up to $100,000, and 75 percent of loans of more than $100,000. Since last June when the program began, over $11 million worth of loans have been made to 110 borrowers.


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