Aiming to spur an additional $1 billion in lending next year, the Small Business Administration will expand two programs that provide federal guarantees of the smallest commercial loans with minimal red tape, starting Oct. 1.

"These programs are fast and easy for both lenders and borrowers," SBA Administrator Aida M. Alvarez said in a prepared statement. The agency aims to nearly double to $2.3 billion the amount of loans backed under these two programs for start-ups, women- and minority-owned companies, and rural businesses in the 1999 fiscal year, she said.

SBA will increase the ceiling on its so-called "LowDoc" program to $150,000, from $100,000. Under this program, the agency backs up to 75% of a loan, uses a one-page application, and relies heavily on the lender's credit analysis. SBA pledged to approve loan applications within 36 hours, cut paperwork further, and systematically reconsider loans that are rejected.

At the same time, SBA will expand its three-year-old "Fastrak" pilot program to at least 500 lenders from the original 18, likewise raise the loan limit to $150,000 from $100,000, and pledge a 36-hour turnaround time. Under this program, which will be re-named "SBAExpress," the agency guarantees only 50% of a loan, and in return lets lenders make the loan without SBA review.

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