The U.S. Small Business Administration (SBA) finalized a pair of rules targeting persistent capital access gaps impacting small business owners in underserved communities.
The rules update lending criteria for its 7(a) and 504 loan programs and expands the number of lenders who can offer SBA-guaranteed loans. Officials said it will provide small businesses with more options for meeting capital needs.
“Modernizing and expanding SBA’s lending programs will open new opportunities to our highly entrepreneurial, yet underserved communities that have far too long been denied access to the funding they need to create jobs and grow our economy,” Small Business Administrator Isabella Casillas Guzman said. “Equity has been a top priority of the Biden-Harris Administration since day one as our economy needs all of our great ideas and talented entrepreneurs. These rule changes demonstrate that commitment by providing government-guaranteed lenders with all the tools they need to close the gaps that still exist for small businesses who need capital.”
According to the SBA, the guidance will also expand the number of Small Business Lending Company (SBLC) licenses promoting responsible small business lending through non-depository lenders backed by SBA loan guarantees.
“It’s imperative that entrepreneurs from underserved communities have access to stable and affordable capital to grow and expand their businesses,” SBA Office of Capital Access Associate Administrator Patrick Kelley said. “With these new rules, the SBA is taking steps to invest in credit-worthy entrepreneurs and mission-oriented lenders, which will build on the Biden-Harris Administration’s progress to date.”