The Small Business Administration’s (SBA) government guaranteed lending programs epitomize successful public-private partnerships, CUNA wrote to the House Small Business Committee Tuesday. The committee conducted a hearing entitled “Catalyzing Economic Growth through SBA Community-Based Lending,” and CUNA noted its opposition to any proposals that allow SBA to implement a direct lending program.

“Credit unions recognize that financial inclusion and access to capital for entrepreneurs are critical to ensuring the growth and development of vibrant small businesses,” the letter reads. “As not-for-profit, consumer-owned financial cooperatives, credit unions have a laser focus on our mission of financial inclusion and serving our members. Establishing and retaining a relationship with a credit union is the best way for a small business entrepreneur to partner with a provider of essential financial services.”

SBA’s lending programs, such as the 7(a) Loan Program, allow small businesses to work with lenders of a business’s choice throughout the loan process. The SBA guarantees these loans ensuring that financial institutions are made whole in an instance of default by the borrower.

The government-guaranteed portions of 7(a) loans do not count against a credit union’s member business lending cap.

CUNA added by SBA becoming a direct lender to small businesses, it would “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.”