A Federal Register (FR) Notification posted on the FR inspection desk on August 8, Small Business Lending Company Application Process [RIN 3245-AH92], announces that, via separate processes, beginning September 2, 2024, SBA’s Office of Capital Access will accept applications for licenses for both regular and Community Advantage (CA) Small Business Lending Companies (SBLCs). The official Notification is expected to be published in the Federal Register on Friday, August 9, 2024.
According to the Notification, SBA will accept applications for regular SBLC licenses between September 2 and October 15, 2024, with the Notification indicating that SBA anticipates issuing up to three new licenses in late 2024 and may issue additional licenses at a future date to applicants “participating in this open period”.
Applications for CA SBLC licenses will be accepted between September 2 and December 20, 2024, with the Notification indicating that SBA may approve an indefinite number of CA SBLC licenses and that, “[d]uring the application period, SBA will review applications on a rolling basis and approve based on each applicant’s merit and readiness to become a CA -SBLC”. Continuing current Agency policy, the Notification indicates that SBA “will limit CA SBLCs to certain geographic areas and loan amounts … [and] will also require CA SBLCs to make at least 60 percent of their loans to eligible small businesses in underserved markets”.
According to the Notification, SBA “may award new SBLC and CA SBLC licenses for a period of 1 year after the application period ends”, subject to the Agency’s right to request updated information in connection with such applications. The Notification also states: “In the review process, SBA will not consider the timing of application submission as long as a substantially complete application is submitted within an open application period”.
Among the list of factors to be used by SBA in evaluating applications for both regular and CA SBLC licenses is the applicant’s “[a]bility to address gaps in small business lending, especially those not served by the existing 7(a) Lender population, including: small-dollar lending, loans to underserved populations, and loans to support small businesses’ efforts to reduce climate change and/or to help small businesses through climate change”. In this regard, the Notification states: “Applicants may present potential market gaps and address their plan and capability to address them”. This evaluation criterion reflects information provided in the SBA press release dated July 22, 2024, wherein SBA Administrator Guzman announced SBA’s new “Green Lender Initiative” and signaled the Agency’s intent to add additional “climate lenders” to SBA’s loan programs to make SBA-guaranteed loans to provide additional capital to small businesses in “support of clean energy investments”.
Final decisions on both regular and CA SBLC license applications will be made by the Director, Office of Financial Program Operations (D/OFPO), in consultation with the Director, Office of Credit Risk Management (D/OCRM), Director, Office of Financial Assistance (D/OFA), Director, Office of Performance and System Management (D/OPSM), and the Deputy Associate Administrator of the Office of Capital Access (DAA/OCA) or designee.
Comments relating to the Federal Registration Notification must be received with 30 days of official publication of the Notification in the Federal Register.
Please see the Federal Register Notification for full details relating to regular and CA SBLC 7(a) lender participation requirements and the complete application submission and evaluation requirements and process. After the official Notification is published, NAGGL will update this posting to provide the FR document number.
