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SBA Direct Lending & SBLCs. ICBA opposes proposals to create an SBA 7(a) direct lending program. Such a program could undermine the existing successful public-private partnership SBA loan programs.
SBA direct lending is a poor and costly alternative to private sector lending and would reach fewer borrowers. Today, there is a strong network of community banks, Community Development Financial Institutions, and other lenders already in place to meet demand for small business borrowers. Further, the SBA has a poor track record in direct lending.
ICBA also opposes proposals to rescind the moratorium on the creation of new small business lending companies (SBLCs) including mission based SBLCs. These nondepository lending institutions are licensed, supervised, and examined by SBA, a government agency that does not have the appropriate resources to ensure that SBLCs operate in a safe and sound manner.
Paycheck Protection Program. Paycheck Protection Program lending data continue to demonstrate that community banks are justifiably recognized as leaders of the financial response to the COVID-19 pandemic. Community banks made 60 percent of all PPP loans—including 72 percent of PPP loans to minority businesses.
ICBA will continue to support policies that ensure community banks can continue to effectively serve both American consumers and small businesses in urban, suburban, and rural communities as they grapple with these historic challenges. ICBA encourages SBA and accountability agencies within the government to investigate the rampant losses observed by SBA through lending by non-bank fintech firms.