Small Business Loan Changes Minorities Should Know

The Federal Government has made some changes to the Small Business Administration that affects programs traditionally focused on providing minority small business loans. The SBA acts as a guarantor for small businesses seeking loans from lenders.

Changes to the SBA Community Express Loan Program

The SBA Community Express Loan program was set up to encourage small business loans to groups that have been underrepresented, meaning minorities and women were given priority. SBA Express loans have been one of the easiest loans for qualified business owners to get, with no collateral required for loans from $5,000 to $25,000.

The government has widened the scope of who gets SBA Express Loans. Priority for these small business loans has changed from targeting women and minorities to focusing on where the business is located. At the same time, the availability of money is restricted because fewer loans are being given out and they are often capped at lower amounts.

Changes to the SBA Microloan Program

A change that could be good for women and minorities seeking small business loans is the decision to increase the SBA's Microloan program. Through the American Recovery and Reinvestment Act of 2009, loans through the program are set to increase by $50 million over the next year and a half. The act also added $24 million in grants for technical assistance. These loans are for $35,000 or less and often go to women and minorities seeking small business loans.