Lenders Urge House Small Business Committee to Streamline SBA’s SOP

February 19, 2025

Bob Coleman
Founder & Publisher

Lenders Urge House Small Business Committee to Streamline SBA’s SOP

Last week, House Small Business Committee Chairman Roger Williams of Texas led a hearing titled “Driving Economic Growth: SBA Lending Programs and the Vital Role of Community Banks.”

There was a interesting q&a between Congressman Rob Bresnahan of Pennsylvania and Mike Sims, representing America’s Credit Unions.

Rep. Bresnahan: 

“What could we do to lessen the bureaucratic red tape to really get dollars into the hands of these entrepreneurs and young businesses that ultimately will make a difference?” 

Sims: 

“I honestly think the place to start is with the SOP, the standard operating procedures of the SBA. 

“Again, I go back to the products being good, the structure of the products being good, and the terms being very flexible, particularly when compared to traditional commercial product sets. 

“I think going through the thousands of pages of the SOP and streamlining how a small business is able to engage with the SBA through their local banker, whether it be a community bank or credit union, is where your expertise lies.

“We’re going to ask them questions to understand what it’s going to take for them to be able to qualify under the SBA requirements. 

“The SBA has requirements for that. You must meet minimum debt service coverage requirements, minimum business experience requirements, and minimum collateral requirements. 

“So even if you wanted to use the SBA vehicle as an opportunity you could not because they would not qualify.

“When (Ms. Heidi DeArment of Montana Community Development) talks about banks and credit unions turning those down, we’re following the SBA procedures. 

“The place to start is to create opportunities for the type of businesses she’s serving. There might be a special program, for example. We talked about an area where they’re maybe disadvantaged or issues are going on in that particular community. 

“You could create a program where those requirements were lessened – still safe, still prudent, but not set at the level they are today.”