Tuesday, July 16, 2024
spot_img
HomeNewsBusiness WireFunding Circle Applauds Biden-Harris Administration’s Plan to Allow Fintech Participation in SBA...

Funding Circle Applauds Biden-Harris Administration’s Plan to Allow Fintech Participation in SBA Flagship 7(a) Program

Small Business Administration (SBA) to lift 40-year moratorium on allowing state-licensed Fintech lenders to originate government-guaranteed small business loans, increasing funding options for 31MM+ small business owners in the U.S.

DENVER–(BUSINESS WIRE)–#FinancialInclusion–The White House this week announced plans to introduce a rule lifting a 1982 Small Business Administration (SBA) moratorium on issuing new licenses for Small Business Lending Companies (SBLCs), which would expand SBA-backed 7(a) loan origination abilities for state licensed and regulated lenders that operate nationally in the United States.

Under this new rule, fintech lenders like Funding Circle — the leading online platform for small business loans — and others, including non-federally regulated lenders and non-depository lending institutions, will be able to begin originating these loans themselves after acquiring an SBLC license from the SBA. Prior to the introduction of S.2690, the Expanding Access to Affordable Credit for Small Businesses Act, state licensed lenders were restricted to issuing SBA 7(a) loans in one state. In addition, since 1982, just 14 SBLC licenses have been issued, further limiting access to funding for many U.S. small and medium businesses (SMBs).

The SBA intends for this policy to increase lending to the smallest and minority-owned businesses amid a steady decline in loans under $250,000 by traditional banks, which the agency has historically relied on to distribute 7(a) and 504 loans. The SBA has received research and motions from members of Congress, and has witnessed firsthand how fintech lenders in the Paycheck Protection Program (PPP) stepped up to serve the businesses disproportionately overlooked by other types of lenders. Expanding the program to include fintech lenders serving the populations SBA is aiming to reach means more small business owners will have access to alternative, government-backed options for funding.

“Funding Circle applauds the Biden Administration, along with Sens. Tim Scott (R-SC) and John Hickenlooper (D-CO) and Reps. Byron Donalds (R-FL) and Jason Crow (D-CO) for working on this bipartisan, bicameral solution to help expand access to capital for America’s smallest and underserved businesses,” said Ryan Metcalf, Head of Public Policy and Social Impact at Funding Circle US.

The announcement follows the release of research conducted by the Bank for International Settlements (BIS) and the Federal Reserve Bank of Philadelphia that analyzed proprietary loan-level data from two fintech small business lending platforms, one of which was Funding Circle. The study found that Funding Circle is expanding credit access to those underserved small business owners who are not likely to receive funding from traditional lenders and is doing so at a lower cost, in part through a more accurate loan risk-assessment process.

About Funding Circle

Funding Circle (LSE: FCH) is the leading online lending platform for small business borrowers. Since 2010, Funding Circle has originated $4.1 billion to 40,000 small businesses in the U.S. and $19.4 billion to 130,000 globally.

For small businesses, Funding Circle provides a leading-edge customer experience, delivered through its technology, machine learning, and data science, coupled with a human touch. Its solutions continue to help customers access the funding they need to succeed.

For institutional investors, Funding Circle provides access to an alternative asset class in an underserved market and delivers robust and attractive returns.

For financial institutions, Funding Circle provides a digital end-to-end lending-as-a-service solution enabling quicker, lower cost financing for their small business customers.

Contacts

For all media Inquiries:
Julia Jaramillo

pr@fundingcircle.com

spot_img
RELATED ARTICLES
spot_img
spot_img
spot_img

Caribbean News

Eastern Cuba makes strides toward circular economy

By Caribbean News Global HOLGUÍN, Cuba, (ACN) - A number of enterprises in the province of Holguin are already applying the postulates of circular...

Global News

UN deputy chief calls for major arms spending cuts and urgent action to save SDGs

By Vibhu Mishra NEW YORK, USA, (UN News) - The UN Deputy Secretary-General on Monday urged global leaders to redirect resources from warfare to peace and...