The recent Federal Register Notification regarding the Small Business Lending Company (SBLC) Application Process is poised to impact the fintech industry, business loan lenders, and brokers. Beginning September 2, 2024, the Small Business Administration (SBA) will accept applications for licenses for both regular and Community Advantage (CA) SBLCs. This initiative is designed to expand the availability of capital to small businesses, particularly those in underserved markets.
Key points of interest include:
Application Periods: Applications for regular SBLC licenses will be accepted until October 15, 2024, with the SBA planning to issue up to three new licenses by the end of the year. For CA SBLC licenses, the application window extends to December 20, 2024, with no cap on the number of licenses that may be approved.
Focus on Underserved Markets: The SBA will require CA SBLCs to allocate at least 60% of their loans to small businesses in underserved areas, aligning with the agency's commitment to addressing lending gaps.
Evaluation Criteria: Applications will be assessed based on the applicant's ability to address lending gaps, including small-dollar loans, loans to underserved populations, and support for small businesses' climate change initiatives. This aligns with the SBA's "Green Lender Initiative" aimed at promoting clean energy investments.
Decision-Making Process: Final decisions on license applications will involve multiple SBA offices, ensuring a comprehensive review process.
This initiative presents opportunities for fintech companies and lenders to expand their services and support small businesses, particularly in underserved markets, thereby fostering economic growth and innovation.
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