WASHINGTON – President Biden's fiscal year 2025 budget request, released in early March, includes a proposal to allow the Small Business Administration (SBA) to make direct loans through the 7(a) loan program. This ill-conceived proposal seeks to manipulate the market by allowing the government to compete with banks and credit unions in providing loans.
U.S. Sen. Kevin Cramer (R-North Dakota), along with Sens. Tim Scott (R-South Carolina) and John Kennedy (R-Louisiana), Protecting Access to Credit for Small Businesses Act Prohibits the Biden Administration from authorizing the Small Business Administration to directly issue 7(a) loans. Not only would the SBA 7(a) Direct Loan Program jeopardize small businesses' access to capital, it would undermine SBA's existing public-private partnership lending program.
“The proposal to allow the SBA to make direct loans under the 7(a) loan program is a clear example of the Biden administration undermining the private sector.” said Senator Cramer. “Protecting small business access to credit is critical and we must stop the federal government’s blatant attempts to control the direct lending sector.”
“The SBA, which acts as a direct lender, has a consistent history of failure and inefficiency when compared to the private sector.” said Senator Scott. “The administration's proposal is nothing more than a vehicle for massive government intervention in nearly every aspect of American life and private institutions. There is no reason at all to use the federal government to funnel tax dollars that can later be loaned to small businesses. there is no.”
“The Small Business Administration’s history of direct lending is characterized by fraud and inefficiency. isn't it.” said Senator Kennedy. “I am proud to work with Senator Scott to prevent the SBA from replacing private lenders and community members with bureaucrats in Washington.”
Organizations supporting the bill include Credit Unions of America, Bank Policy Institute, Independent Community Bankers of America, Consumer Bankers Association, and American Bankers Association.
Additional co-sponsors include Jim Risch (R-IA), Chuck Grassley (R-IA), Steve Daines (R-MT), James Lankford (R-OK), and Joni Ernst. (R-Iowa) and John Cornyn (R-Iowa). (Texas), Tom Cotton (R-Arkansas), Rick Scott (R-Florida), and Mike Brown (R-Indiana).
Click here for the text of the invoice.
