SBA to Expand Loan Program

The Small Business Administration will expand a program that helps disadvantaged business owners secure loans, pre-qualifying them before the lender enters the picture, Vice President Al Gore said Thursday.

The Pre-Qualification Loan Program, now open only to women and minorities, is being expanded to include veterans, exporters, certain specialized industries and rural small-business owners. The program has been available in the SBA’s Los Angeles district since 1995, but the expanded version will now be available throughout the country.

Under the program, selected community agencies help business owners through the borrowing process, developing business plans and loan packages. The SBA then pre-qualifies the applicant for SBA-backed loans and notifies lenders. In the standard process, the borrower applies directly to the commercial lender before seeking an SBA guaranty.

Gore announced the changes during the National Assn. for the Advancement of Colored People convention in Atlanta.

In the Los Angeles district, 16 organizations participate in the program, including several Small Business Development Centers, CHARO, USC Business Expansion Network and Operation HOPE. Between Jan. 1 and June 30, the groups helped 47 businesses secure $4.8 million in loans.