Small Business Access to Capital Coalition members are encouraging lawmakers to avoid an Oct. 1 shutdown of the Small Business Administration’s (SBA) flagship 7(a) business loan program.
The coalition, which includes the Asian American Hotel Owners Association, the National Association for the Self Employed, the National Association of Manufacturers, the National Small Business Association, the Small Business & Entrepreneurship Council, and the American Bankers Association (ABA), recently forwarded correspondence to the Subcommittee on Financial Services & General Government Appropriations.
The issue, per the Coalition, is if the Office of Management and Budget (OMB) does not issue a correction before Sept. 30, the fees collected from borrowers and lenders to support the program will not be sufficient to cover OMB’s cost estimate. They maintain the program will shut down unless Congress fills the funding gap with appropriated funds or increased fees.
The ABA, in particular, is urging Congress to consider what it deemed a modest appropriation to support the program to avoid shifting the burden of an erroneous subsidy rate estimate onto the backs of small borrowers.
“In recent years, OMB and SBA have failed to carry out their roles in the subsidy estimation process in the objective manner envisioned by FCRA,” the coalition wrote. “Consequently, we believe Congress should act to ensure the continued effectiveness of this program that is so crucial to the small business sector.”