SBA Updates Lending Program

April 1, 2022

On Wednesday, March 30, Vice President Kamala Harris and Administrator for the U.S. Small Business Administration (SBA) Isabella Casillas Guzman announced reforms to the agency’s Community Advantage (CA) loan program. CA is a key tool for Community Development Financial Institutions (CDFIs), Community Development Companies (CDCs), microlenders, and other mission-based lending partners. It prioritizes equitable access to capital for low-income borrowers and people from underserved communities.

The reforms include:

  • Extending the pilot program to September 30, 2024, from the original end date in September 2022;
  • Lifting the four-year lender moratorium, allowing the SBA to grow the lender network;
  • Increasing the maximum loan size to $350,000 for the new expanded number of lenders, up from the current $250,000, for SBA’s 7(a) government-guaranteed loan program;
  • Removing restrictions which keep individuals with criminal backgrounds from accessing the CA.
  • Simplifying underwriting and collateral requirements for borrowers and lenders;
  • Introducing additional abilities for lenders to make revolvers and lines of credit, interest-only periods, and other loan modifications; and
  • Redefining packaging fee guidelines to better enable lenders participating in CA to scale and increase volume to underserved communities.

Administrator Guzman underlined the importance of mission-driven lenders in getting much-needed financial relief to underserved businesses throughout the COVID pandemic. “Scaling the SBA’s Community Advantage pilot program will help us build on that momentum, create a broader distribution network and better ensure the opportunities of our nation’s accelerating recovery are accessible to more entrepreneurs pursuing their American dreams of starting and growing a successful business,” said Administrator Guzman.

You can find more information about the reforms here.