Due to the impact COVID-19 has had on the economy, the U.S. Small Business Administration (SBA) has revised the criteria for states or territories seeking an economic injury declaration related to Coronavirus. The U.S. SBA is making it easier, faster and simplifying the qualification process in order to provide immediate assistance for the 30.7 million small business owners who are currently affected by the pandemic and in need of emergency financial aid. The agency has the authority to open the program to other lenders who have the capability and qualifications to process, close, disburse and service loans.
NXTSoft has developed some frequently asked questions to address the concerns of lending agencies who may now be able to originate these new SBA loans.
If my business is not a traditional bank or credit union, can I still offer an SBA loan to consumers?
Yes, the U.S. SBA has made the program available to lenders who have the capability and qualification to process, close, disburse and service loans.
How do I enroll to be an SBA certified lender?
The SBA has three lending programs: 7(a), CDC/504, and Microloan. Each program has its own lending practices and eligibility requirements for lenders. Review the details of each, then decide which program is best for you. For more information and how to apply click here.
What types of expenses does the SBA Economic Injury Disaster Loan cover?
The SBA Economic Injury Disaster Loan helps small business owners cover expenses such as fixed debts (rent, etc.), payroll, accounts payable, and certain bills that could have been paid had the disaster not occurred.
What is the Paycheck Protection Program?
The Paycheck Protection Program (PPP) is a modified and expanded SBA 7(a) loan program for businesses that are currently struggling due to financial uncertainty caused by the coronavirus (COVID-19) pandemic.
How long will it last?
The Paycheck Protection Program is available for small business who submit their applications by June 30th 2020. Read more about the PPP here.
New SBA regulations allow institutions other than banks and credit unions to take advantage of processing loans for the disaster relief program. The FDIC requires financial institutions to board and hold these loans in their core systems. Because this program has never been open to other lenders outside of traditional institutions, the opportunity for lending platforms is great. Since each loan must reside in a core system, automated integration into the core processing is beneficial. NXTsoft’s secure APIs can automate the loan boarding process and expedite the setup and implementation to get your software company boarding loans to any core. Get in touch if we can help!