The Small Business 7(a) Lending Oversight Reform Act of 2018 just passed in the Senate. The bill promises to make more government-backed small business loans available by giving the Small Business Administration the power to increase the yearly limit on loans it guarantees. The SBA will be allowed to raise the annual ceiling on its 7(a) loan program by 15%.
This increase in the SBA’s ability to guarantee loans means more money in the pockets of small businesses. While the SBA isn’t personally providing the loans, they are providing guarantees to banks, meaning that banks will be able to more securely provide money to small businesses.
“This program is critical to credit unions’ ability to provide loans to small businesses and entrepreneurs in their communities, which is an integral part of the industry,” says NAFCU President and CEO Dan Berger. And he’s not the only one in high spirits about the bill.
“The SBA programs are an important part of business lending for many banks,” said the American Banker Association in a letter to House members last month. “They help fill a critical gap, particularly for early-stage businesses that need access to longer-term loans. The guarantee helps reduce the risk and capital required for banks and facilitates loans that might never have been made without this important level of support. ABA has long supported this successful public-private partnership and is pleased that Congress recognizes the importance of this program.”
The resounding support for the bill by members of the financial community and its bipartisan support in Congress are a great indication of regulatory progress for small businesses. Many business owners have struggled with unnecessary regulations and hindrances in the past. While there are still regulatory roadblocks today, this bill marks a step in the right direction for small business interests.
We can only hope that congress will stay aware of issues facing small businesses in the future. A healthy relationship between hard-working American entrepreneurs and government leaders has long been sought after.
The bill now makes its way to the desk of the president where it’s expected to be signed into law.