On Thursday, July 23, the Small Business Administration (SBA) announced it had reached its annual lending limit for its biggest loan program, the 7(a) loan. Consequently, applications for small business loans filed by over 1,100 potential borrowers had to be put on hold. Now, less than a week later, both houses of Congress have moved swiftly to pass a bill that will jumpstart the program again.
The SBA’s lending limit for the 7(a) loan program is capped at $18.75 billion a year, which is why some analysts were both shocked and encouraged to hear that the agency had already hit that ceiling with two months left to go in the government’s current fiscal year.
“This is a good problem to have,” Tony Wilkinson, president of the industry trade group National Association of Government Guaranteed Lenders, tells The New York Times. “It’s a good economic sign that businesses are willing to borrow again.”
That same Thursday, the Senate quickly passed a bill that would raise the SBA’s annual lending cap for the 7(a) loan program to $23.5 billion. The House approved the bill this past Monday, July 27, sending it to President Obama’s desk. The president is expected to sign the bill, which should then restart the application review process for those 1,100 borrowers currently in limbo by the end of the week.
As FOX Business notes, the high demand for a 7(a) SBA loan indicates that the economy is bouncing back in a big way, with small business owners looking to take on more borrowing as a means for expanding their companies.
If you’re an Ohio entrepreneur looking to take out a loan that will expand the size of your company, refinance debt, buy up new property or finance any renovations necessary, consult with Growth Capital Corp. today!
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