January 12, 2016
by Walter McLaughlin
Contributor, SBA Hot Topic Tuesday
SBA Hot Topic Tuesday — Matchmaking SBA Style
Referrals from District Office personnel. SCORE counseling and workshops. SBA-backed Small Business Development Centers. Thanks to the diligence displayed by all three sources, it’s clear that marketing has always been high on the SBA’s list of priorities.
As important as these referrals are—and I’ve made loans generated by all of them throughout my career—the borrowers typically require plenty of up front assistance prior to knocking on the lender’s door. In most cases, that’s a good thing, as it helps ensure the borrowers are ready and therefore have a higher likelihood of being approved. However, the scope and outreach through these delivery methods has traditionally been limited by personnel, process and geography. As SBA lending volume boomed in recent years, a growing imbalance between supply and demand came to light.
What if the aforementioned limitations were removed? Thanks to the SBA LINC program, they have.
The LINC initiative
Early in 2015, the Small Business Administration launched its Leveraging Information and Networks to access Capital (LINC) program. The LINC program provides an efficient means for borrowers and lenders to find one another, meeting the Agency’s continuing goal to modernize and take advantage of current technology. The program gives the borrower quicker options at their fingertips when seeking financing for their small business.
It’s important to note that the initiative is not limited to start-ups. Companies of all shapes and sizes register and complete a 20-question online form. Once finished, the request is shared with all participating lenders in the borrower’s designated territory (delineated by state or county). The lenders receive a short synopsis of the request with the choice to either “opt in” or “opt out” with respect to the potential borrower. If a lender chooses to “opt in”, more details are provided, including the contact information of the potential borrower. The borrower is notified that the lender has shown interest in their request.
It’s that simple. Lenders may signup electronically through their user profiles within the Capital Access Login System (CLS).
There are no published statistics available yet regarding the number of loans generated using the new online platform, but early results are promising, according to Scott Bossom, Lender Relations Specialist from the SBA Portland District Office.
“All the lender has to say is that we want to see deals from these counties and specify a dollar amount,” said Bossom. “I’ve definitely heard lenders are getting opportunities from it, and there have been deals from the connections they’ve made.”
The future of LINC
To this point, the system is still being refined, with the likelihood of further evolution over time. As Bossom says, “Ultimately, the plan is to have more functionality so lenders can designate what kind of deal they want to see.”
Between SBAOne, electronic signatures, the retiring of decades-old forms and LINC, the Agency is certainly fulfilling its mission to modernize its marketing and delivery methods. All this change is making me want to lie down