Bill giving SBA more power over loan program passes Congress
More small business owners may be able to get government-backed loans after Congress gave the Small Business Administration the power to increase the yearly limit on loans it guarantees.
A bill that won Senate approval last week allows the SBA to raise the annual ceiling on its 7(a) loan program by 15 percent. Under current law, the SBA must ask Congress to raise the ceiling; the limit for the fiscal year that ends Sept. 30 is $27.5 billion. The bill must still be signed into law by President Donald Trump.
The bill, like most small business legislation, had bipartisan support. It’s designed to prevent the SBA from losing its ability to guarantee loans if it’s flooded by applications. In 2015, the agency reached its $18.75 billion ceiling in late July, with more than two months to go in the government’s fiscal year. Loan applications went on hold for five days until Congress passed legislation raising the limit to $23.5 billion.
The 7(a) loan program is the SBA’s most popular. Loans guaranteed under the program can be used for a variety of reasons, including buying a company, real estate, equipment or refinancing an existing loan. The SBA doesn’t actually lend the money; it guarantees loans made by banks.
Although the bill aims to make more money available to small businesses, it also gives the SBA more authority to regulate banks’ small business lending practices. The bill spells out new procedures for lenders found to have violated federal law or regulations related to the 7(a) program.
SOCIAL MEDIA MARKETING
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