The Small Business Administration Community Advantage Pilot Program hit a major milestone this week- they reached the $100 million mark.
Community Advantage (CA) reached this milestone over three years after the initiative to increase lending to underserved communities was launched in February 2011.
Community Advantage was designed as a three-year pilot program aimed at increasing the number of SBA 7(a) lenders who reach underserved communities, targeting community-based, mission-focused financial institutions, which were previously not able to offer SBA loans. Its initial success prompted SBA to extend the program for another three years to March 15, 2017.
“Many of those entrepreneurs belong to communities that traditionally have been underserved,” said SBA Administrator Maria Contreras-Sweet. “The future of our country is truly in the hands of the American entrepreneur. This landmark [milestone] shows that Community Advantage is proving an effective tool in reaching borrowers needing smaller loans to whom a bank can’t quite say ‘yes’.”
Community Advantage has undergone several enhancements along the way that have made the program even more attractive to lenders and more available to borrowers. Among these include the creation of CA Associates, lowered reserve requirements and the ability to refinance microloans.
Eighty-three lenders have been approved for Community Advantage nationwide and including their loan referral associates CA Loans are available in nearly 200 locations. SBA approved 744 loans for $100 million, with the average loan size of $135,503.
However, 41% of approved CA loans have been for $100,000 or less. The loans in the program have ranged from $15,000 to $250,000, the program’s maximum.
Many of the more than 700 businesses that received CA loans have experienced great success that would not have been possible otherwise. AuditGuard of Arlington, Texas, a firm specializing in counseling taxpayers under the threat of an IRS audit is one such company.
Since receiving a loan from PeopleFund, an SBA Microloan and Community Advantage lender since 2011, AuditGuard has entered a significant growth phase securing major contracts with some of largest tax software distributors and bank affiliates in the industry. With CA Loans up to $250,000 PeopleFund will be able to be to help support AuditGuard’s successful growth.
“[The loan obtained through] PeopleFund was instrumental in helping AuditGuard expand its infrastructure and launch a marketing campaign that resulted in tremendous growth and new contracts,” said Jacqueline Hernandez-Morrison, the company owner.