New legislation is making its way through congress that will make it easier for businesses to obtain funding through the SBA. It’s called the Small Business 7(a) Lending Oversight Reform Act of 2018, and it’s already passed in the House.
“This bipartisan legislation would increase the Small Business Administration’s oversight authority over its 7(a) loan program,” said the NAFCU Vice President of Legislative Affairs Brad Thaler in a letter to house congressional leaders. “The 7(a) loan program is critical to credit unions’ ability to provide loans to small businesses and entrepreneurs, and NAFCU believes this legislation would only improve the already very important program.”
The SBA’s 7(a) program is one upon which many small businesses rely for startup funding. According to the SBA’s website, “the 7(a) Program lets you get loan amounts (up to $5 million) to fund startup costs, buy equipment and more.” Funds received through this program can be used to purchase new land, repair existing capital, purchase or expand an existing business, refinance existing debt, and purchase equipment.
“ICBA and the nation’s community bankers thank the House for passing this much-needed bill to promote a robust and sustainable 7(a) program to help small businesses create jobs and strengthen our economy,” says ICBA President and CEO Rebeca Romero Rainey. And really, promoting small business is the crux of this new legislation.
The bill will allow the SBA to lift the cap on general business loans by up to 15% of the limit. It will also reinforce the authority of the SBA’s Office of Credit Risk Management and Lender Oversight Committee to dictate and maintain a reasonable budget.
More important than the specifics of the bill, however, is what it will represent to the hard-working entrepreneurs fighting for their own little piece of the American dream. It’s a show of faith in small business by congress.
We can only hope legislation like this will continue to be passed by the government so that small businesses can stop worrying about how to fund their ideas and get back to what they do best—building the future of American business, and our economy.