Will SBA Borrowers be Shown the Door?
March 12, 2013
By Bob Coleman
Editor, Coleman Report
New York Times’ Robb Mandelbaum always runs insightful, analytical articles about SBA.
Yesterday’s asks the question if the proposed agency changes to eliminate the personal resource test and loosen affiliate definitions are implemented, will that expand the pool of eligible borrowers?
SBA would then probably hit its authorized ceiling cap. Throw in the sequester cuts and “it’s likely the agency will turn some small-business borrowers away. The only question is, which borrowers will be shown the door.”
I commented:
Nice recap Robb.
I applaud the agency for streamlining its paperwork. And remember, the key “credit elsewhere” test remains. In other words, while some larger, so called middle market, small businesses may now in theory be eligible for S.B.A. loans with the proposed changes, they would still be ineligible for S.B.A. as they could obtain conventional loans. Also, a loan cap of $5 million would be insufficient for these middle-market companies.
I don’t see too many small businesses being shown the door with these changes.
However, being turned away due to sequestration is an entirely different story.