Bloomberg BNA: Lawmaker Wants E-Signatures for SBA Loans; Says Proposal Would Cut Application Time
September 18, 2014
Sept. 18 (BNA) -- The Small Business Administration would have to accept electronic signatures in its financing programs under a proposal that the sponsor says would cut the loan application process an average of two to three days.
A 2000 law, the Electronic Signatures in Global and National Commerce Act, made valid e-signatures on binding documents, but their use is not universal. Rep. Sam Graves (R-Mo.) says his bill, the Small Business Loan Simplification Act of 2014, permits participants in SBA financing programs — borrowers and lenders — to use electronic signatures and records in the certification and transmission of documents. The legislation also requires the SBA to accept electronic signatures and records associated with the management of its financing programs.
Graves said a long, complicated loan application process “is often a great impediment for many small businesses to secure the capital they need to get their products or services to market.”
Reform SBA Loan Process
“ The majority of the time spent during the SBA loan application process consists of lenders collecting required documentation and having to seek out the ink signatures of borrowers,” said Graves, who chairs the House Small Business Committee. “The Small Business Loan Simplification Act of 2014 will employ widely used and proven e-signature and records technology to reform the SBA loan process. This will likely cut the application process by an average of 2 to 3 days.”
A committee press release says general bank lending to small businesses hasn't returned to pre-recession levels and cites Federal Deposit Insurance Corporation figures showing that at the end of the first quarter, banks held $585 billion in loans to small businesses, 18 percent lower than in 2008.