WASHINGTON (7/29/15)--The U.S. House voted Monday night to raise the cap on the Small Business Administration’s (SBA) 7(a) program, which combined with a Senate vote last week, allows the SBA to begin lending again. Lending had been suspended as of July 23, due to the agency reaching the $18.5 billion cap allotted for fiscal year 2015.
The SBA is now authorized for up to $23.5 billion in 7(a) loans through Sept. 30. The 7(a) program allows the SBA to guarantee up to 85% of a loan, and for credit unions the guaranteed portion is not counted against the statutory cap of 12.25% of assets.
SBA Administrator Maria Contreras-Sweet released a statement Tuesday thanking Congress for raising the 7(a) authorization ceiling, and credited the agency’s streamlining of its loan processes for this year’s unprecedented demand.
“We have seen record levels of lending this year, showing us that America’s small businesses are thriving and yearning to grow,” she said. “We have streamlined our processes, reduced fees, and bolstered our outreach to our lending partners.”
The 7(a) program operates at a zero subsidy from taxpayers due to the underwriting process and fees associated with the program. According to analysis from the Congressional Budget Office, there is no cost to taxpayers associated with raising the cap.
According to CUNA research, 377 credit unions have outstanding SBA loans totaling more than $1.4 billion, as of March 30.