October 19, 2022
C-Suite Wednesday – SBA Proposes to Extend SBLC Licenses to More Lenders
On October 4th, the White House announced that the SBA is going to propose a rule change that would lift the moratorium on new Small Business Lending Companies, allowing new lenders to obtain licenses to lend through the 7(a) program. There are currently only 14 licenses for non-depository lenders, but the White House and SBA’s rule change proposal opens SBLC license applications to more lenders for the first time since 1982.
The purpose of this policy initiative is to continue the SBA’s mission to reach underserved markets by increasing the number of 7(a) lenders and therefore increasing small businesses’ access to capital. Lifting the moratorium would also allow Fintech lenders to apply for and obtain SBLC licenses, giving them the ability to write SBA-backed 7(a) loans.
The SBA has yet to propose the rule, but the White House’s release disclosed that the SBA will propose this rule sometime this Fall. Lenders will have to consider the compliance costs and resources necessary to obtain a lending license.
White House Press Release