On May 22, 2023, a notification regarding the Small Business Lending Company Application Process was published in the Federal Register (RIN 3245-AH92).
The purpose of the notification is to “announce that SBA’s Office of Capital Access (OCA) is opening the application period for new Small Business Lending Companies (SBLC) licenses from June 1, 2023, to July 31, 2023, and share the process by which interested entities may apply”.
The notice describes the ongoing requirements that must be met by SBLCs and explains the processes by which an entity may acquire an SBLC license, which include either purchasing the license of an existing SBLC or applying for a new license. It also provides information regarding the documentation that must be provided by an entity seeking to be licensed as an SBLC 7(a) lender and the process for submitting a license application.
The notice also describes the SBA evaluation process and states: “In addition to SBA’s evaluation of the elements requirement in the SBLC application, SBA may consider risk factors in its evaluation [as enumerated in the notice]”. Finally, it states that the final determination on an application will be made by the SBA Director, Office of Financial Program Operations, in consultation with the Directors of the Offices of Credit Risk Management, Financial Assistance, Performance and System Management, and the Deputy Associate Administrator of the Office of Capital Access, or designee.
The notice indicates that after the application submission period closes, SBA will review and process all applications and will award up to three new regular SBLC licenses in the fall of 2023. No information is provided regarding how licenses will be awarded if there are more than three applicants.
Finally, the notice indicates that SBA is not accepting applications for Community Advantage SBLCs (CA SBLCs) at this time, but that qualified entities may continue to apply for CA Pilot Program lender authority until September 30, 2023. Based on information included in Information Notice 5000-846918, Community Advantage Small Business Lending Company Conversion (effective May 1, 2023), we assume that newly approved CA Pilot Program lenders will be eligible to convert to CA SBLC status.
Interested parties may submit comments regarding the Federal Register notification during the comment period which will close 30 days after the notice is officially published which will be June 21, 2023.
