SBA Evades Funding Circle SBLC Questions

March 21, 2024

Delaney Sexton
Contributing Editor

SBA Evades Funding Circle SBLC Questions

Kentucky Representative McGarvey asked SBA Administrator Guzman about the recent news of Funding Circle offloading their US operations and what that means for their newly awarded SBLC license:

“I’d love to hear an answer about November 2023 when the Funding Circle was awarded one of the three new SBLC licenses to help support small businesses and increase access to capital for business owners in underserved markets. We know the UK-based lender started making 7(a) loans this year, but they are now offloading their US small business lending operations. How does this impact your vision for SBLC operations?”

After acknowledging the 14 existing SBLCs and the nearly 140 additional CA SBLCs, she goes on to say, “Funding Circle is the last of the three newly awarded SBLCs that has not started doing lending. We are still in the process.”

She talks of the other two new SBLCs but breezes over the topic of Funding Circle offloading their US operations. Administrator Guzman says, “Funding Circle continues to work with the SBA, my team, to fulfill the SBLC license and ensure that they can start lending with SBA products in the community. They were a strong performing PPP lender, really getting hands into those smallest of the small businesses focused on making sure they could survive during the pandemic. That is still in process. We are still going through the steps that are necessary for them to meet all of our standards at the SBA, and when that is complete, we can inform the Committee.”

With his remaining time, Representative McGarvey says “The SBA retains authority to approve or not approve the sale of licenses. Should the Funding Circle choose to sell the license to the entity you don’t support, would you commit to not approving the sale?”

Administrator Guzman responds, “That’s correct. We’ve done it in the past, we’ve denied sales in the past.”

House Committee Hearing