11 Aug BPC Action Applauds Expanding Access to Credit for Small Businesses Act in Economics and Finance
BPC Action commends Sens. Tim Scott (R-SC) and John Hickenlooper (D-CO) for their leadership in introducing S. 2690, the Expanding Access to Credit for Small Businesses Act. The bill would build on successful features of the Paycheck Protection Program (PPP) by allowing more non-depository financial institutions to participate in government-guaranteed small business lending.
During the COVID-19 pandemic—when millions of small businesses sought assistance through PPP— non-depository lenders, such as fintech companies, helped fill crucial capital gaps. These lenders were found to be highly effective in getting small PPP loans to businesses owned by people of color. Prior to the pandemic, non-depository lenders were generally not permitted to participate in the Small Business Administration (SBA)’s 7(a) loan guarantee, which PPP was based on. Since 1982, a moratorium has meant that only 14 Small Business Lending Company (SBLC) licenses have been available for non-depository lenders to make 7(a) loans.
As the country heads toward economic recovery, expanding access to capital for small businesses—especially those hardest hit by the crisis—will be critical. In a recent report, the Bipartisan Policy Center recommended that Congress and the SBA find ways to expand the base of lender participation in the 7(a) program. The Expanding Access to Credit for Small Businesses Act would remove the SBLC license moratorium and provide resources for oversight and reporting at the SBA. The bill is an important step in ensuring that small businesses, particularly those owned by people of color, can access the credit they need to grow.
BPC Action is committed to helping this legislation become signed into law.