The American Bankers Association today expressed its support for a bill to prohibit the Small Business Administration from directly making loans under the 7(a) loan program.
The Protecting Access to Credit for Small Businesses Act would prevent the SBA from moving ahead with proposals to establish a direct lending program. In a letter to Senate Banking Committee Chairman Tim Scott (R-S.C.), the association said the existing 7(a) loan program is a successful private-public partnership that enables banks and other private lenders to extend credit to small businesses that may not otherwise qualify for conventional loans.
Rather than expand the federal government’s role in direct lending, Congress should focus on strengthening the existing 7(a) framework, ABA said. “By encouraging more banks to participate in the 7(a) program, increasing outreach and education to small business owners, and streamlining the loan application process, Congress can enhance access to capital without displacing the private sector’s vital role in small business lending,” it said.
