The difference? SBA's new LowDoc--that is, low documentation--loan program, which the agency developed in consultation with both small business owners and commercial lenders.  The program, which enables the SBA to guarantee up to 90 percent of a loan to a business, a business start-up, or a business purchase, focuses heavily on the borrower's character, credit, and business experience.
SBA launched the program in San Antonio in May 1993, expanding it to the rest of Texas as well as Louisiana, Arkansas, Oklahoma, and New Mexico. Based on its success in increasing the number of small loan approvals in a short time, particularly for women- and minority-owned businesses, SBA Administrator Erskine Bowles took the program nationwide this summer. SBA officials say they don't expect the reduced paperwork to make these small loans any riskier.
The program, which reflects a key goal of Bowles' performance agreement with the President, isn't his only effort to make life easier for small business owners. He and Sally Katzen, director of OMB's Office of Information and Regulatory Affairs, have initiated meetings with small business owners and other agencies to find ways to reduce the paperwork burden on small business.