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NEWS | Two New SBA Rules Set to Change SBLC, Lending for Small Business

The number of SBLC licenses has remain unchanged since 1982.

After more than 40 years, the U.S. Small Business Administration (SBA) is ending its moratorium on admitting new nonbank lenders to its 7(a) loan program.

SBA’s 7(a) program is its flagship loan program facilitated through banks and guaranteed nearly 54,000 loans worth more than $36.5 billion in 2021.

The SBA rule published in the Federal Register this week will allow non-depository lenders to apply for Small Business Lending Company Licenses (SBLCs), including fintech lenders. SBA’s new standard on lending is set to take effect May 11, with a purpose of growing SBA’s 7(a) lending base to better serve underserved markets.

While the number of 7(a) loan applications continues to increase as more Americans start a small business, the number of SBLC licenses has remain unchanged since 1982. Poised to admit three new SBLCs into the program, the SBA is offering continued assurances that new lenders will not lack oversight or proper service to the nation’s small-business community.

Non-bank lenders and fintechs often offer flexible credit options and small dollar loans – services not typically prioritized at traditional banks – and SBA’s rule change is an opportunity for more than 8,000 community banks and credit unions to offer affordable loans quickly in underserved communities.

Relatedly, an additional new SBA rule on Affiliation and Lending Criteria for the SBA Business Loan Programs will be effective May 11, with a number of agencies and groups already implementing new lending and data sharing practices to support economic recovery and growth.

Under this Affiliation and Lending rule change, the SBA will examine each lender applicant on an individual basis to determine capital requirements to hold a license.

NSBA will continue to monitor rollout of these rules. Read the complete SBLC Moratorium Rescission rule here, the Affiliation and Lending Criteria rule here, and follow us for the latest.


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