The Consumer Bankers Association (CBA) is encouraging Congress to explore all options to reopen the Small Business Administration’s 7(a) and 504 loan programs.
“Small businesses were among the first to feel the effects of this shutdown due to the inability of the SBA to process and guarantee loans within its programs, including the important 7(a) and 504 programs, among others,” Richard Hunt, CBA president and CEO, wrote in correspondence to lawmakers. “These programs, which work with preferred lenders, remain a vital source of lending for many small businesses that would not otherwise qualify for conventional lending,”
Hunt said the loans also allow the nation’s small businesses to expand, hire new workers and grow local economies.
The correspondence maintains many banks expedited loan applications in advance of the Dec. 22, 2018, shutdown, but since that time have not been able to make loans to small business owners. Banks have discussed making short-term bridge loans available to businesses, but have concerns doing so could violate the credit elsewhere statute, potentially making businesses ineligible for traditional SBA loans once the government reopens.
CBA officials said, in addition to working to help small businesses, organization member banks have been working with furloughed federal workers since the shutdown began.