Pennsylvania Banker Advocates for Stronger SBA Lending Programs

The Small Business Administration’s loan programs play a vital role in ensuring that the nation’s community banks are able to meet the credit needs of their small business customers, Pennsylvania banker Patricia Husic said today, testifying on behalf of ABA at a House Small Business Committee hearing. Husic is president and CEO of Centric Bank in Harrisburg, Pa., and an ABA board member.

“The SBA programs are an important part of business lending for many banks,” Husic said, citing several examples of Centric Bank customers who have benefited from the SBA’s 7(a) loan program, including an Army veteran who wanted to open a gun range that would provide off-duty police training, a restaurant manager who was able to purchase his own business and a minority-owned construction business seeking to expand.  “They help fill a critical gap, particularly for early stage businesses that need access to longer-term funds,” she said. “The guarantee helps reduce the risk and capital required for banks and facilitates loans that might never have been made without this important level of support.”

Husic noted ABA’s support for H.R. 4743, a bipartisan bill introduced by Reps. Steve Chabot (R-Ohio) and Nydia Velazquez (D-N.Y.) that would strengthen the SBA’s oversight and allow the program’s maximum lending authority to be increased for general business loans up to 115 percent of the fiscal year’s limit. If enacted, this legislation would grant additional certainty to lenders that funds will be available and help ensure the continued safety and soundness of the SBA loan programs, she said.

Additional changes to the SBA’s 7(a) lending program could further improve its overall effectiveness, Husic added. These changes include enabling consolidation or refinancing of SBA loans by the same lender; providing a carve-out for small portfolio lenders under $1 billion in assets that would allow them to obtain a guaranty to avoid regulatory loans-to-one-borrower limitations; improving the role of subcontractors in the liquidation process; facilitating liquidation of multiple loans to a borrower; and allowing a seller of a business to remain as an employee for up to two years when selling a business.