The Small Business Administration began testing a program this month that lets banks process loans under $100,000 over the Internet.

Charles Thomas, chief of pilot operations for SBA's office of financial assistance, said six of the 18 lenders that use the agency's Fastrak program plan to process these loans on-line.

"It streamlines the loan process," said Pamela Davis, vice president and manager of the SBA lending department at CoreStates, which was one of the first banks to sign on.

The Fastrak program, a two-year-old pilot, lets lenders make their own lending decisions and use their own forms to make loans under $100,000. But the SBA guarantees only 50% of Fastrak loans, as opposed to 90% for conventional ones.

Rather than faxing loan papers to the SBA, the lenders can now type the loan applicant's information into a computer and transmit it electronically to the SBA's processing center.

The SBA uses a screening system that quickly checks whether the loan meets the agency's requirements. An SBA employee later reviews the loan decision.

"This program was conceived in the context of diminishing SBA resources to transfer more of the lending authority to the lenders," Mr. Thomas said.

Internet processing lets the bank get lending authority from the SBA in 10 minutes rather than the several days traditional loan processing takes, Ms. Davis said.

"Our lenders need to be able to spend their time in the most productive way possible, and that is not waiting for telephone calls and faxes from the SBA," she said.

The bank lenders still meet face-to-face with the borrowers, who are required to sign paper loan documents at one of the bank branches, Ms. Davis said.

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