Which SBA loan applicants need a little more time to get loan approval?
More than two years ago, the U.S. Department of Housing and Urban Development issued guidance requiring banks to consider “extended loan terms” to help borrowers get their loans approved.
But that guidance didn’t go far enough.
So the agency issued a new rule on Tuesday that requires lenders to consider the length of a borrower’s term of servicer, which can be as long as 30 years.
In its announcement, the agency said the new rule will “strengthen the quality and consistency of loan approvals, enhance borrower protection, and promote the orderly flow of federal and private capital into the financial system.”
That’s good news for borrowers who may need a lot of help getting their loans under the radar, but who can often afford to wait until their next payday to get their loan approved.
SBA spokeswoman Stephanie McInnis said the agency will continue to work with regulators to make sure that loans are approved and serviced properly.
The agency will also continue to ensure that borrowers have access to credit counseling and financial education, she said.