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Loan program expansion to help veterans

Veterans across the country are expected to benefit from the expansion of a lending program operated jointly by the Small Business Administration (SBA) and the National Community Reinvention Coalition (NCRC).

The SBA announced July 28 that its Community Express Loan Program _ designed to provide inner city and rural communities with venture capital, commercial loan credits and technical assistance _ is going national. The program was launched in June 1999 with nine banks representing 20 localities. The expansion will increase the number of participating banks to 500.

The program is aimed at "new markets" _ low- and moderate-income urban and rural areas _ and specifically targets small businesses owned by veterans, women and minorities.

"The partnership between the SBA and the NCRC provides critically needed access to capital for small businesses in traditionally underserved areas of the country, along with technical and management assistance to loan recipients," said SBA Administrator Aida Alvarez. "And now that we are expanding this program nationwide, more Americans will have the opportunity to fully participate in the mainstream of the U.S. economy by starting and growing successful small businesses."

One of the program's objectives is to help small business owners obtain SBA-guaranteed loans. In some cases, a bank won't issue a loan unless it's guaranteed. In such an event, the SBA will guarantee most of the loan for eligible applicants. Loans up to $100,000 are guaranteed for 80 percent; those between $100,000 and $750,000 are guaranteed for 75 percent.

"We encourage applicants to apply at a bank first and then, if necessary, to get in contact with the SBA," said Mike Stamler, SBA spokesperson. "Also, an applicant should use a bank they know."

Available loans include term loans, lines of credit and commercial mortgages. Loans can be used for purchasing inventory, machinery and equipment, land and buildings, or for working capital.

Critical to the program is the training and support provided to applicants by the NCRC, according to Stamler.

Training includes information about government and accounting permits, accounting systems and employee tax withholding.

"When you're an employee, it's easy to look at your paycheck and see what's been taken out," Stamler said. "But when you're an employer, you need to know what to take out.

The NCRC will also help small-business owners develop a business plan _ finding out location and what equipment will be needed."

The nonprofit NCRC, made up of 680 community development and advocacy groups, aims to revitalize economically disadvantaged areas and ensure access to credit, capital and banking services. About 110 loans between $5,000 and $250,000, totaling approximately $11.1 million, have been approved since the program's start.

Ten percent of the loans have gone to veterans, 43 percent to women and one-third to minority-owned businesses.

The most competent lenders may be nominated for the SBA's Preferred Lender Program (PLP), under which lenders are given full authority for handling almost all aspects of the program.

For more information, call (800) U-ASK-SBA or visit www.sba.gov

Information for this article was taken from Stars and Stripes.

_ Royce Carter is the Citrus County Veterans Service Officer. Contact him at 527-5411.

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