“If there’s broad agreement that small businesses are the engine that powers the American economy, shouldn’t it be easier to fuel the tank?” writes SBA administrator Maria Contreras-Sweet.
“Access to credit continues to bedevil too many U.S. entrepreneurs,” she says. “Eighty percent of small business loan applications are rejected, according to some industry estimates, and more applications than we can count are never filed because of the difficulty of getting an appointment with a loan officer.”
There’s no question access to capital is a challenge for many small business owners. And, Contreras-Sweet has been talking about taking a lesson or two from non-bank online lenders for quite some time now. It looks like the SBA is doing more than just talking about it. “Online matchmaking services pairing lenders with prospective borrowers comprise a multibillion-dollar industry,” she says.
Contreras-Sweet intends to harness the power of the Internet to introduce more SBA lenders to qualified borrowers. “The SBA not only supports this concept; we’re implementing it,” she says. “Today [2/9/2015], at the National Press Club, I announced a new SBA initiative called LINC (Leveraging Information and Networks to access Capital). Our matchmaking service will help entrepreneurs get a date with a lender.”
LINC is driven by a simple 20-question from to help pre-screen potential borrowers. A successful pre-screen will result in the form being distributed to every participating SBA lender in the borrower’s county and put the business owner on a fast track. That doesn’t mean a borrower who didn’t qualify before will somehow magically qualify now—it does mean qualified borrowers who fell through the cracks because the application process was too cumbersome will now have greater access.
Launching LINC will take place in two phases, first to non-profit lenders that offer free financial advice and specialize in micro-lending and smaller loans, including the SBA’s Community Advantage program. Later this year, the SBA will be adding more traditional lenders to the system.