Ernst Applauds SBA Rollback of Irresponsible Biden-Era Lending Changes
WASHINGTON – U.S. Senate Committee on Small Business and Entrepreneurship Chair Joni Ernst (R-Iowa) released the following statement after Small Business Administration (SBA) Administrator Kelly Loeffler paused the Biden-era Community Advantage Small Business Lending Company (SBLC) program that was designed to provide taxpayer-backed 7(a) loans with riskier underwriting through non-profit mission-based lenders.
The Community Advantage program generated a 7% default rate over the last 12 months – more than double that of the overall 7(a) loan portfolio.
“SBA lending programs should be purely based on economic viability,” said Ernst. “The Biden SBA enabled risky lending practices while putting millions of worthy small businesses on the back burner. I am relieved to see Administrator Loeffler continue to restore fiscal responsibility to the agency’s flagship 7(a) lending program to ensure that taxpayers are not forced to foot the bill.”
The conversion of Community Advantage lenders to Small Business Lending Companies is another example of the irresponsible management of the SBA’s loan programs by the Biden administration. This change was intended to make the Community Advantage Pilot Program permanent without Congressional authorization.
Background:
Ernst discussed undoing the damage of the Biden administration and fixing the financial integrity of the 7(a) loan program with Administrator Kelly Loeffler during her confirmation hearing.
During a hearing earlier this year, Ernst detailed how the Biden administration’s loosening of rules and reckless expansion of the program increased the risk for American taxpayers. She went on to describe how the Trump SBA could fix the 7(a) program.
In a letter to President Trump on his first day in office, Ernst highlighted Biden’s mismanagement of the program that threatened to force taxpayers to foot the bill.
Ernst repeatedly raised concerns that the Biden administration’s rapid expansion of the 7(a) lending program was leaving taxpayers on the hook for risky lending practices by non-bank lenders.
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