Sen. Tim Scott introduced a bill to prevent the Small Business Administration from becoming a direct lender Tuesday, the Protecting Access to Credit for Small Businesses Act (S. 3382). The bill would prevent the SBA from directly making loans under the 7(a) program.
“We support all efforts to prevent SBA from becoming a direct lender and thank Sen. Scott for this legislation," said CUNA President/CEO Jim Nussle. "The current public-private partnership between lenders and the SBA benefits everyone involved, helping foster important relationships between businesses and their community. Turning the SBA into a direct lender would negatively affect these relationships and disrupt the current system at a time when small businesses need access to capital more than ever.”
CUNA wrote Scott in support of the bill Tuesday, noting that SBA’s government guaranteed lending programs epitomize a successful public-private partnership.
“This public private partnership works as borrowers can obtain loans from financial institutions that they know well and that have vested interests in their borrowers’ success. Furthermore, when working with local lenders, small businesses are likely to benefit from guidance and experience from a lender with a stake in helping the borrowing business succeed,” the letter reads. “By becoming a direct lender to small businesses, the SBA is likely to harm local financial institutions’ relationships with businesses and possibly hamper these businesses from establishing important banking relationships that can only help their business survive and flourish.
CUNA also supports a similar bill introduced in the House by Rep. Blaine Luetkemeyer (R-Mo.).