Earlier this month, the Senate passed a bill that will allow the Small Business Administration (SBA) to raise its cap for 7(a) general business loans by 15 percent.
H.R. 4743, introduced by House Committee on Small Business Chairman Steve Chabot (R-OH), Senate Small Business and Entrepreneurship Committee Chairman Jim Risch (R-ID) and Ranking Member Nydia Velázquez (D-NY), and Senator Jeanne Shaheen (D-NH), received bipartisan support. It aims to help more small businesses access capital by ensuring that the SBA can continue to guarantee loans during periods of high demand.
As reported by Inc., in July 2015 the SBA reached its loan ceiling with more than two months left in the fiscal year. Because existing law requires that the agency receive congressional approval in order to raise its ceiling, loan application went on hold for five days until Congress passed legislation to raise the limit. The new bill resolves this problem by allowing the agency to raise the ceiling by 15 percent if it will be reached within that fiscal year.
The bill additionally gives the SBA more authority to regulate banks’ small business lending practices. It establishes a new Lender Oversight Committee and allows the SBA to fine lenders up to $100,000 for violations of federal law or regulations related to the 7(a) loan program. In order to take effect, the bill requires President Trump’s signature.