Article by Pat Osborn, MBA
SBA will now credit score all 7a Guaranteed Loans of $350,000 or less. Obviously they do not think much of the Borrowers that get the “Small Loans” of up to $350,000. SBA will do loans up to $5,000,000 that’s Five Million Dollars. The Loans of up to $350,000 seem to be a nucience since the SBA does not look at loans approved but the DOLLAR VOLUME and The JOBS CREATED. These are the things that they can use in there marketing to publishise there Mission. That Mission is to generate as many Large Loans as they can so they can use those High Numbers to Show How Great They Are. Anyone in the Real Business World knows that most of the Small Business Loans are less than $350,000 and the SBA is not helping the people that they say is there Mission – Small Business.
SBA said in a meeting on January 22, 2014 that they did not know how the SCORE was arrived at or what criteria was in the Score. They leave that up to FAIR ISSAC to determine. If that is the Case then how do they know they are doing loans that the banks cannot make on their own?
Obviously it is easier to Credit Score Loans similar to the BIG BANKS, and the large banks have long been criticized for using Credit Scoring to limit the number of Small Business Loans that they do. Some larger banks do not do loans under $250,000 and will tell borrowers to put it on a Credit Card.
I don’t know where the SBA People live but you would think they could just go outside and ask small business owners on the Street, What is a Small Business Loan to Them, and I bet They are going to Say That a Small Business Loan is anywhere from $50,000 to $500,000. It is a pretty big business that needs a loan of One Million Dollars or More. Don’t get me wrong, I think it is Great that SBA will do loans up to Five Million Dollars but I don’t see those large loans in my Neck of the Woods. I feel that SBA should do a Reality Check and go outside there offices in Sunny California and walk the streets of Midwest America and see what most small businesses are needing. I think they would be surprised.