SBA Administrator Guzman Opens Application Window for Lenders Filling Gaps in Credit Markets

Nonbank Licenses Will Enable SBA Loan Guarantees to Spur Lending in Underserved Communities and for Green Investments

Today, Administrator Isabel Casillas Guzman, head of the U.S. Small Business Administration (SBA) and the voice in President Biden’s Cabinet for America’s more than 34 million small businesses, opened applications for non-traditional lenders to secure an SBA Small Business Lending Company (SBLC) license. The agency is seeking applicants positioned to fill gaps in small business lending, including small-dollar lending, loans to underserved populations, and green lending.

“The Biden-Harris Administration’s Investing in America agenda has unleashed new opportunities for small businesses while working to level the playing field for entrepreneurs and lenders alike. The SBA’s new actions will play a key role in this Administration’s efforts to fill capital gaps while also aligning public investments with private capital,” said Administrator Guzman. “Whether it’s leveraging the Biden-Harris Administration’s tax credits to become more energy efficient or seeking to start a thriving business in an underserved community, these SBA initiatives will help entrepreneurs and mission-driven lenders continue to drive the historic Small Business Boom we’re seeing under this Administration.”

Starting now, organizations interested in SBA lending can apply to become national Small Business Lending Companies (SBLCs) or nonprofit Community Advantage Small Business Lending Companies (CA SBLCs) and make small business 7(a) loans with SBA backing. Leveraging the SBA’s 7(a) loan program, these lending companies use private capital to lend to small businesses with the SBA guaranteeing the loan. This guaranty allows lenders to reach the underserved small businesses that they would not be able to support without government backing.

SBLCs can make these SBA loans nationwide, up to $5 million, while CA SBLCs currently lend up to $350,000 and only in specific geographic areas. Administrator Guzman announced the expansion of the CA SBLC loan maximum up to $500,000 for active lenders, and the opening of an application process for lenders to expand up to $1 million generally or $2 million for climate projects. The SBA will also open an application process for CA SBLCs to expand their geographic reach.

Applications are welcome from America’s thousands of local, regional, and national nonprofit organizations, cooperatives, public-private partnerships, tribal-owned nonprofits, community development financial institutions, and other organizations interested in expanding financing options to their small business communities. Recipients of the EPA’s Greenhouse Gas Reduction Fund (GGRF) planning to finance small businesses, many of which meet the SBA’s eligibility criteria, are encouraged to apply.

The application process and instructions are published in the Federal Register.

• The SBA will accept applications for new Small Business Lending Companies (SBLC) licenses from now through Oct. 15. The SBA plans to award up to three additional licenses. The SBA will consider an applicant’s ability to fill market gaps in lending to underserved communities and underrepresented entrepreneurs, as well as lending that helps small businesses reduce greenhouse gas emissions or adapt to climate change.
• The SBA will accept applications for new Community Advantage SBLCs (CA SBLCs) now through Dec. 20. The SBA plans to award an indefinite number of new licenses. CA SBLCs must make 60% or more of their loans within underserved markets.

The SBA is hosting virtual public information sessions for organizations interested in learning more. Meetings are recorded, and attendance will remain confidential:

• The first session is for prospective SBLCs:Thursday, Sept. 12  3 p.m. Eastern | Register here
• The second session is for prospective CA SBLCs:Tuesday, Sept. 24  3 p.m. Eastern | Register here

To learn more about the SBA’s Green Lender opportunities, see online information about becoming an SBA lender, contact your local SBA District Office, or email GreenLending@sba.gov