Thursday, February 15, 2018

White House FY19 Budget Fully Funds SBA 7(a), 504 Loan Programs

From Coleman Report

The White House’s FY 2019 proposed budget released [recently] supports $30 billion in SBA 7(a) funding. That is a 10% increase over anticipated $27 billion in loans for FY 2018.

Given the Administrator’s newly granted ability to increase 7(a) by 10% if needed at the end of a fiscal year, there should be sufficient 7(a) loan supply to meet 7(a) loan demand.

The White House is weighing in on the credit elsewhere rule saying:

SBA fills a critical void in the market when economic shocks reduce traditional lending to small businesses and when the private market is unwilling to provide capital to credit-worthy borrowers. However, during prosperous economic times such as these, the Budget proposes that SBA introduce counter-cyclical policies to its business loan guarantee programs that enables it to maintain its operations while ensuring that it is not displacing direct private lending.

Through an adjustment of fees across its business loan guarantee programs, SBA would cover both its anticipated lending and operational costs, leveling the playing field among its lender community while operating at zero cost to the taxpayer.

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