CHARLESTON – President Donald J. Trump recently signed the bipartisan, bicameral Small Business 7(a) Lending Oversight Reform Act into law.
Led by House Small Business Committee Chair Steve Chabot (R-OH), Senator Jeanne Shaheen (D-NH), Chairman of the Senate Committee on Small Business and Entrepreneurship Jim Risch (R-ID), and House Ranking Member Nydia Velázquez (D-NY); the Reform Act improves access to capital for small business owners by ensuring appropriate oversight of the U.S. Small Business Administration’s (SBA) flagship 7(a) loan program.
The bill passed both committees unanimously, and passed the House and Senate without objection before going to the President’s desk for his signature.
The 7(a) loan program was created to help entrepreneurs gain access to credit in order to start and grow their businesses when they are unable to qualify for a conventional loan. It can be a “make or break” cash infusion that gets small businesses doing what they do best, creating jobs in their community and supporting the American economy.
Millions of American entrepreneurs use and repay billions of dollars in 7(a) loans each year.
The Small Business 7(a) Lending Oversight Reform Act updates the “credit elsewhere” test, which is the entry point to the program; increases oversight of the program and transparency to Congress, and provides flexibility for SBA’s Administrator to increase the program’s authorization cap in an emergency. It ensures SBA has the tools it needs, provides lenders with needed clarity, and makes sure entrepreneurs and small business owners have access to funds they would otherwise not be able to obtain.
Whether it is a new military contractor in Virginia Beach, or a family owned craft brewer in Erie, small businesses face the common challenge of finding affordable financing. An improved 7(a) program ensures more businesses can access capital to grow, invest in their operations and, ultimately, create jobs.
This bill was widely supported in the small business community, including by the National Association of Government Guaranteed Lenders (NAGGL), the Independent Community Bankers of America (ICBA), the American Bankers Association (ABA), the National Association of Federally-Insured Credit Unions (NAFCU), the Consumer Bankers Association (CBA), the Credit Union National Association (CUNA), and the U.S. Chamber of Commerce.
Check out our online Lender Match tool to find an SBA-approved lender to help you through the process. I also encourage you to visit your local SBA office or a “Powered by SBA” partner organization for help putting together the business plan you’ll need to qualify for an SBA-backed loan.
Christian is the SBA's Mid-Atlantic Regional Administrator.