FY24 Funding Update

Updated 5:00 PM, March 25, 2024

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In the final steps of a very long FY24 funding process, the full-year FY24 appropriations bills were signed into law by President Biden on Saturday. The Senate passed the package in the early hours of Saturday morning, just missing the Friday night deadline for a FY24 funding deal for the remaining agencies. Because of that timing, while technically there was a government shutdown in those early Saturday morning hours, there was minimal impact across the federal government.

When it comes to SBA 7(a) lending, full year FY24 authorization and funding is now in effect. As a reminder from past updates [link here], the following FY24 levels apply: 7(a) Loan Program’s authorization cap (or gross loan volume in dollars permitted this FY) is $35 billion (loans approved by SBA since the beginning of the fiscal year will count against this overall cap), the Secondary Market Guarantee Program’s authorization cap is $15 billion, and both programs are operating at zero subsidy. These caps should provide sufficient volume given lending trends in FY24. 

UPDATE ON FY24 FUNDING PACKAGE AND PROSPECTS OF A POTENTIAL SHORT-TERM SHUTDOWN

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**Watch this space on NAGGL’s website where updates may be posted as necessary.

Final FY2024 funding text was finally released overnight, shedding light on where SBA programs stand for the FY and starting the clock on a legislative process to fund the remaining portions of the federal government for the rest of the FY.

The text of the final negotiated funding package reveals:

  • 7(a) Loan Program Authorization Cap: $35 billion (flat from FY23)
  • Secondary Market Guarantee Program (SMGP) Authorization Cap: $15 billion (flat from FY23)
  • OCRM Resources: $12 million (flat from FY23)
  • NO further language requested by the Administration to create an annual fee on secondary market users is included

Both the 7(a) and the SMGP authorization caps should be sufficient to cover demand in both programs in FY24 given overall volume trends as they currently stand.

Keep in mind that many of the proposals from the Agency that we have recently discussed (i.e. direct lending) are now being requested by the Agency for next FY, since FY25 discussions began while FY24 negotiations were still ongoing.

Shutdown Prospects?: Please be aware that there is a slightly increased risk for a short-term government shutdown, although most are speculating that any lapse would likely only be a few hours or over the weekend. The risk comes from the timing of a series of standard procedural hurdles in both the House and Senate that, if not bypassed or expedited, would push final votes to pass the funding package well past the 11:59 PM ET deadline for a funding lapse.

However, the House has already indicated that a vote on the funding package could come as soon as 11 AM ET tomorrow morning, and Senate leaders have indicated that they are working on a deal to expedite passage to avoid a Saturday shutdown. But a brief funding lapse, or shutdown, over the weekend is still not entirely out of the question (as of publication of this message).

NAGGL continues to advise its members that the best course of action is to empty lender pipelines and submit all loans ready for approval into ETran, understanding that, during the period of any lapse, no new loans could be approved. The vast majority of SBA functions and operations would also cease during any funding lapse.

NAGGL will keep you updated, as always.