Grow your business with LINC.
While the business financing climate is looking better these days, it is sad to note that 35% or approximately 8 million of small businesses failed to access additional capital in 2013, according to a report published by the National Small Business Association. As a result, 36% of businesses belonging to this group were unable to expand their operations while 20% were even forced to reduce their staff due to extremely limited capital.
The Federal Deposit Insurance Corporation (FDIC) also reported that small business loans under $1 million have been on a steady decline since 2008 while the Federal Reserve Bank of New York estimated that only 57% of small businesses applying for loans of less than $100,000 succeeded in securing additional capital. According to industry estimates, an overwhelming 80% of small business loans are eventually rejected leaving small business owners unable to sustain their expansion plans or even get their businesses off the ground.
Introducing LINC: SBA?s New Online Tool for Entrepreneurs Looking for Additional Capital
Recognizing the seriousness of the situation, the U.S. Small Business Administration (SBA) launched LINC, a new online tool designed to connect entrepreneurs with SBA-approved lenders. To facilitate the process, LINC (Leveraging Information and Networks to Access Capital) requires borrowers to fill out a simple online form with 20 questions.
After answering the questions (it only takes less than five minutes to completely fill out the form), the information will then be blasted to lenders within the borrower?s county, and to lenders with regional and/or national reach. Interested lenders would then respond within 48 hours after reviewing the information submitted by the borrower. Please keep in mind that a positive hit may not guarantee that you will receive a loan. It would, however, get you a step closer to gaining access to additional capital since you have already been pre-screened.
On the other hand, if you failed to attract the attention of any interested lenders, the SBA would direct you to a local SBA adviser who can provide additional assistance with your loan application.
LINC is being rolled out in two distinct waves. Phase 1, which started early this year, aims to connect small business owners with non-profit lenders specializing in micro-lending (loan limit of $50,000). Small loans (up to $250,000) are also made available through the SBA?s Community Advantage program and real estate financing or the 504 program. Phase 2, which will be rolled out later this year, will include more traditional banks and a wider array of financial products.