Both the ICBA and the ABA urged the House Small Business Committee to continue with its reform of the SBA 7(a) Loan Program on Wednesday during testimony on the Small Business 7(a) Lending Oversight Reform Act of 2018. Cynthia Blankenship and Patricia Husic, on behalf of the ICBA and the ABA, respectively, argued the program helps many small businesses get started.
“The Small Business Administration’s 7(a) Loan Program allows community banks to leverage their unique underwriting skills to more effectively serve the small businesses in their communities,” said Blankenship, president of Bank of the West, Grapevine, Texas. “A robust and sustainable 7(a) program with broad community bank participation will help small businesses thrive and create jobs, strengthening and extending the economic recovery.”
The reform would, among other things, stabilize funding if the SBA limit on general business loans is reached, granting the SBA the ability to raise the cap by 15 percent. In 2015, such a situation disrupted lending.
“This is an important measure that gives lenders added certainty that 7(a) Loan Program funds will be available so that they can meet the needs of their customers,” said Husic, who is president and CEO of Centric Bank, Harrisburg, Pa. “It also ensures that small businesses will not be affected by temporary shutdowns in the program, leaving them unable to meet payroll, purchase needed inventory or secure necessary equipment and supplies to continue their operations and help grow their local economies.”
The reform also seeks to better program oversight to limit fraud while furthering efficiency.