WASHINGTON (12/22/15)--The Small Business Administration’s (SBA) 7(a) loan program is authorized for a total of $26.5 billion in fiscal year 2016, an increase of $8 billion, per the government funding bill that was signed into law last week by President Barack Obama.
The SBA 504 program, for real estate and equipment, has been authorized for $7.5 billion for fiscal year 2016.
The SBA’s 7(a) loan program allows the agency to guarantee up to 85% of a loan. For credit unions, this means the SBA-guaranteed portion of a member business loan does not count against the statutory cap of 12.25% of assets.
Credit unions saw a number of successes related to the 7(a) program in 2015, including HawaiiUSA FCU, Honolulu, being named a top SBA lender. In its first year with an SBA program, HawaiiUSA delivered 218 loans with a total volume of $6.98 billion, the first time a lender in the Hawaii District Office has ever crossed the 200-loan threshold.
In February, CUNA, the Ohio Credit Union League and the SBA highlighted the mutually beneficial relationship between credit unions and the agency, with CUNA Chief Operating Officer Rich Meade joining SBA Administrator Maria Contreras-Sweet for an event to build awareness.
The National Credit Union Administration and the SBA entered into a partnership in February designed to provide more capital to small businesses. In addition, Contreras-Sweet highlighted credit union lending to small businesses in an April interview.
The 7(a) program was authorized for $18.5 billion for fiscal year 2015, a cap it hit in July, causing the SBA to suspend lending through the 7(a) program. It was re-authorized by the end of July for a cap of $23.5 billion for the fiscal year ending Sept. 30, 2015.