SBA is offering $971,800 in cash loans to help pay off loans to borrowers with the loan-to-value (LTV) model.
The loans are aimed at people with credit scores between 700 and 850 and are offered at a rate of 3.25% interest per month.
“This is another important step in the path to full and effective participation of all Americans with credit.”
SBA Director of Financial Services Brian Stoehr said in a release.
“Lenders across the country are looking for ways to help people get the credit they need to secure loans.
These loans provide an opportunity for borrowers to make that transition without the risk of losing their credit scores.”
Borrowers will receive the loans by the end of the year, but the agency is not allowing them to repay the loans at this time.
The agency has a $1.6 billion loan guarantee program, but lenders are not required to provide the same level of assistance as credit unions and other non-bank lenders.
The program also requires lenders to offer loans to individuals who have not previously applied for loans and has a balance at the end.
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