CUNA to Congress: No More Direct Lending From the SBA, Please
On Tuesday the Credit Union National Association wrote letters to the House and Senate Small Business Committees stating that it is in the best interest for small business entrepreneurs to partner with a financial service provider, rather than the Small Business Administration directly. CUNA addressed their role in supporting emerging businesses and argued for policies that would block the SBA from serving as a direct lender. The letters will be brought forward at an oversight hearing to examine the SBA on Wednesday.
CUNA stated, “… we strongly support legislation – such as S. 3382 and H.R. 6037 – that would prohibit the SBA from directly making loans under the 7(a) Loan Program and oppose any efforts in the FY 2023 Budget to fund a direct lending program.”
As the SBA became a direct lender during the COVID-19 pandemic, relationships between small businesses and financial service providers have not been able to form.
“… when working with local lenders, small businesses are likely to benefit from guidance and experience from a lender with a stake in helping the borrowing business succeed. By becoming a direct lender to small businesses, the SBA is likely to harm local financial institutions’ relationships with businesses and possibly hamper these businesses from establishing important banking relationships that can only help their business survive and flourish.”
At the small business committee hearing, Congressman Stauber questioned SBA Administrator Guzman on how the Biden administration is helping both the middle class and small businesses with inflation.
Guzman discussed how the President is taking action on energy costs, “he has made available a million barrels a day, to try to control some of the gas costs which we know are affecting our small businesses…”
Stauber responded, “…the strategic petroleum reserve really should be held for national emergencies not failed policies…” He further mentioned his concerns as he believes the administration is not acting quick enough as inflationary costs are rising for small businesses.Last modified: April 28, 2022
Larissa Brulato writes for deBanked. Connect with me on LinkedIn.