SBA OIG Finds No Problems in Funding Circle’s SBLC License Issuance
February 18, 2025
Bob Coleman
Founder & Publisher
SBA Hot Topic Tuesday — SBA OIG Finds No Problems in Funding Circle’s SBLC License Issuance
In the midst of the chaos surrounding the transition to a Trump 2.0 administration, the Office of Inspector General issued a report last week absolving the SBA of any poor judgment in granting three Small Business Lending Company (SBLC) licenses on November 1, 2023.
Two of the licenses were uncontroversial. One was issued to Arkansas Capital for its commitment to the underserved rural Main Street market, and another to Alaska Growth Capital for its commitment to Native American small businesses. Both of these lenders have long, distinguished track records in SBA lending.
The problem arose with the third license, granted to Funding Circle. Immediately upon receiving its license, the parent company, based in London, announced it was pulling out of the United States small business lending market. After concerns that the company would sell the license at an immense premium, the license was returned to the SBA and “retired.”
In the current political climate, SBA’s Inspector General, Hannibal Ware, was fired in the first week of the Trump administration, and the report was issued by the deputy Inspector General. The agency is currently between administrators while awaiting Senate confirmation of Kelly Loeffler. The report was addressed to Everett Woodel, Jr., the current SBA acting administrator.
The report stated: “We reviewed the applications for the three awarded licenses and determined they contained all the information SBA required. We also reviewed SBA’s evaluation process and found the agency reviewed each application according to its criteria.”
The report further detailed:
“SBA Complied with Procedures When Awarding SBLC Licenses
SBA used multiple factors in its decision making to award three new SBLC licenses that included a review of the strengths and weaknesses of each applicant. These factors included the applicant’s:
• prior commercial lending experience;
• cash position;
• focus on underserved markets;
• projected average loan size; and
• projected loan volume.
Two of the three selected SBLC licensees, Arkansas Capital Corporation and Alaska Growth Capital BIDCO, Inc., were existing 7(a) lenders with extensive SBA lending experience, a history of focusing on underserved markets, qualified professional management teams, and well-developed business plans. SBA selected the third SBLC licensee, FC SBA Lending LLC, based on its cash position, projected loan volume, and a smaller projected average loan size. SBA deemed an SBLC with a smaller average loan size could play a crucial role in better serving the needs of underserved markets.
We reviewed the three applications selected for the SBLC licenses and determined they contained all the information outlined in the Federal Register.”
Separately, the SBA Issued four additional SBLC licenses in December:
- Stonehenge Capital – Baton Rouge, Louisiana
- Cooperative Business Services – Cincinnati, Ohio
- A10 Capital – Boise, Idaho
- Lafayette Square – Miami, Florida