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Prequalification Programs
Written by: Start Your BusinessArticle Overview: The Prequalification Loan program uses intermediary organizations to assist prospective borrowers in developing viable loan application packages and securing loans. This program targets low income borrowers, disabled business owners, new and emerging businesses, veterans, exporters, rural and specialized industries.
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Prequalification Programs
Prequalification Programs
The Prequalification Loan program uses intermediary organizations to assist prospective borrowers in developing viable loan application packages and securing loans. This program targets low income borrowers, disabled business owners, new and emerging businesses, veterans, exporters, rural and specialized industries.
The job of the intermediary is to work with the applicant to make sure the business plan is complete and that the application is both eligible and has credit merit. If the intermediary is satisfied that the application has a chance for approval, it will send it to the SBA for processing. To find out whether there is a pre-qualification intermediary operating in your area, contact your local SBA office. Note: Small Business Development Centers serving as intermediaries do not charge a fee for loan packaging. For-profit organizations will charge a fee.
Once the loan package is assembled, it is submitted to the SBA for expedited consideration. SBA conducts a thorough analysis of the case, using the same time frame and degree of analysis that it uses when processing requests under the regular method of delivery process.
If SBA decides the application is eligible and has sufficient credit merit to warrant approval, it will issue a commitment letter on behalf of the applicant. The commitment letter or pre-qualification letter, indicates SBA's willingness to guaranty a loan made by a lender under certain terms and conditions. The intermediary then helps the borrower locate a lender offering the most competitive rates. The applicant then takes the letter and its application documents to a lender for a decision.
Policies Specific to the Prequalification Program
The maximum loan amount for this pilot program is $250,000. Interest Rates, Maturities, Collateral policy, and Guaranty percentages all follow the standard 7(a) loan program.
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About the Author: Start Your Business RSS for Start Your's articles - Visit Start Your's website Starting a business requires you to complete a number of steps and make some key decisions. Though part of your overall plan, you’ll need to select a location, decide on a business structure, and obtain the necessary licenses and permits. In addition, determining which financing options will meet your short-term needs and long-term goals is crucial. Within this section, we’ll provide information on these topics along with guidance on buying an existing business, copyright and trademark issues, and getting support from an outside expert. Click here to visit Start Your's website Fair Credit Reporting Closing Checklist Never Take No for an Answer Prequalification Programs SBA Loan Programs |
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