If he actually gets in and does this, that would be stupid. I have been in small business funding for 5 years. All of those demographics, except the Asians, have an extremely high failure rate and terrible personal credit on average. We're talking about sub 600 FICO.
No, I do get it because I'm in the business of small business lending.
Underwriting standards will not materially change and neither will the percentage of the loan that the government is willing to guaranty in order for the lender to originate.
Without either or both of those changing, loan volume to minority owned small business will not materially change.
Well what's going to happen is that this is all talk. Government does not just hand a borrower a check. What they do is they guaranty a portion of the loans made by a bank, credit union, etc. So lenders will be responsible for loan origination, which requires an underwriting process with clear standards that are set it stone.
They can prioritize all they want but unless they A. change the underwriting guidelines and B. guaranty a larger portion of the loans then loan volume is not going to materially going to change. But they can virtue signal and cherry pick the hand full of minority owned businesses that are approved and maybe get a year or 2 of success while meanwhile ignoring the huge rejection and failure rate.
If he actually gets in and does this, that would be stupid. I have been in small business funding for 5 years. All of those demographics, except the Asians, have an extremely high failure rate and terrible personal credit on average. We're talking about sub 600 FICO.
nearly all will fail within a year or 2
Good riddance
No, I do get it because I'm in the business of small business lending.
Underwriting standards will not materially change and neither will the percentage of the loan that the government is willing to guaranty in order for the lender to originate.
Without either or both of those changing, loan volume to minority owned small business will not materially change.
It's like giving financial aid and scholarships based on race, not test scores, as Asians tend to have higher standardized scores than whites.
Well what's going to happen is that this is all talk. Government does not just hand a borrower a check. What they do is they guaranty a portion of the loans made by a bank, credit union, etc. So lenders will be responsible for loan origination, which requires an underwriting process with clear standards that are set it stone.
They can prioritize all they want but unless they A. change the underwriting guidelines and B. guaranty a larger portion of the loans then loan volume is not going to materially going to change. But they can virtue signal and cherry pick the hand full of minority owned businesses that are approved and maybe get a year or 2 of success while meanwhile ignoring the huge rejection and failure rate.