ARLINGTON, Va.–Numerous financial trade groups have come together to discuss what they are hearing and doing in response to support increased lending to small businesses and provide relief as the coronavirus pandemic continues to take its toll.
"We are hearing from our members that the [Small Business administration (SBA)] departments at institutions across the country are being flooded as billions in small business loans are no longer able to be made conventionally," the groups said in a joint letter to Congress.
Specifically, NAFCU noted the trades groups are seeking enhancements to the Small Business Administration's (SBA) 7(a) loan program to ensure lending can be done right now to preserve the small business economy.
Those enhancements include:
- Fee waivers for small business borrowers and lenders
- Increased federal guaranty
- Increased deferment flexibility to remove existing hurdles and provide borrowers critical deferment relief
- Increased maximum loan size for all 7(a) loans
- Increased maximum loan size for all Express loans
- Increased general 7(a) and secondary market authorization caps to allow for increased lending while utilizing the above enhancements
Other Recommendations
In order to encourage speed in providing SBA loans, the groups has also recommended authority for the SBA administrator to:
- Waive real estate appraisal requirements prior to loan closing
- Suspend requirements that the income tax verifications are necessary prior to loan closing.
The groups urged that these SBA loan enhancements be included in the final CARES Act to help address economic concerns of the coronavirus.