Want a date with a lender? Here’s help

Stan Nakano
Stan Nakano

Cash flow constitutes the lifeblood of small businesses. Across the nation, thousands of small firms search for term and real estate loans, equipment financing, lines of credit and invoice financing to help them build their businesses and create new jobs. Finding a business loan can be time consuming and often frustrating and disappointing.

Changes in technology have made the process of finding and securing a small business loan less tedious. Online matchmaking services pairing lenders with prospective borrowers has become a multi-billion dollar industry. A television commercial depicts a creditworthy home buyer who goes online and is delighted to find banks competing to finance her home. Small business lending is the next frontier for these online matchmaking services. Using the power of the Internet, commercial lenders are finding creditworthy business borrowers while entrepreneurs are finding loan officers ready to sit down and talk specifics.

The U.S. Small Business Administration not only supports this concept, but also embraces it. SBA Administrator Maria Contreras-Sweet recently announced an initiative called LINC — Leveraging Information and Networks to access Capital.

Our commercial loan matchmaking service will help entrepreneurs get a “date” with a lender. SBA spent months surveying its lending partners to discern what critical information they require from prospective borrowers before a loan application will be considered. Based on those discussions, we’ve developed a simple online form with 20 questions that takes less than 15 minutes to complete and submit. Once completed, the form is sent to participating SBA lenders in an applicant’s county as well as financial institutions with a statewide or national reach.

While a positive preliminary response from a lender doesn’t ensure  entrepreneurs will receive loans, it does put them on a fast track because they’ll have already been prescreened. If LINC doesn’t produce an immediate match, entrepreneurs will be directed to their local SBA adviser for additional assistance with their loan application. It’s a win-win-win situation for the business owner, lender and SBA.

LINC is expanding small business lending options beyond someone’s local bank. Instead, technology can help them get their foot in the door based on their merits at one of many commercial lenders nationwide. This new program has allowed the SBA to become more innovative and creative in the way it does business given current technology.

SBA is rolling out LINC in two phases. First we’re connecting small business owners with nonprofit lenders that offer free financial advice and specialize in microlending, smaller loans (our Community Advantage program), and real estate financing (our 504 program). Phase one began in early April and is off to a strong start. We already have participating LINC lenders in all 50 states, the District of Columbia and Puerto Rico.

Later this year, in phase two, we plan to add more traditional banks that offer an even wider array of financial products. In the longer term, we also believe LINC could be modified to facilitate government contracting by connecting eligible small businesses with procurement officers, prime contractors and federal buyers.

For more information on LINC or to apply for a business loan, visit www.sba.gov/tools/linc.

I’m proud to say SBA is changing with the times and has embraced technology in meeting the needs of small businesses in 2015 and beyond.