WASHINGTON—The House voted Tuesday in favor of the Small Business Administration's 7(a) loan program.
The Small Business 7(a) Lending Oversight Reform Act of 2018 (HR 4743) would enhance accessibility of capital for American small businesses.
Prior to the vote, both CUNA and NAFCU wrote letters in support of the bill, which would give credit unions the opportunity to provide additional lending to qualified entrepreneurs.
Under the 7(a) program, up to 85% of the amount of a loan can be guaranteed by the government. This is particularly impactful for credit unions as the guaranteed amount does not count against their statutory member business lending cap, CUNA noted.
“We thank members of the House for supporting this bill, which will help enhance small business lending opportunities around the country. CUNA strongly supports efforts to increase business lending opportunities under the SBA,” said CUNA President/CEO Jim Nussle. “The improved facilitation and transparency created by HR 4743 will benefit small businesses and create additional opportunities for credit unions to lend to member businesses.”
Furthermore, HR 4743 improves the lending program under Section 7(a) by:
- Strengthening programs of SBA's Office of Credit Risk Management
- Enhancing SBA's lender oversight review process
- Clarifying the "Credit Elsewhere Test"
NAFCU’s Vice President of Legislative Affairs Brad Thaler Tuesday sent a letter to House Congressional leaders urging their support of the legislation.
"This bipartisan legislation would increase the Small Business Administration's oversight authority over its 7(a) loan program, including increasing the office's enforcement options," Thaler wrote to House Speaker Paul Ryan (R-WI) and House Minority Leader Nancy Pelosi (D-CA). "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."