Isabel Guzman, Administrator of the U.S. Small Business Administration (SBA), recently revealed that the SBA has granted three new Small Business Lending Company (SBLC) licenses. This move marks the first expansion of the SBLC program in over four decades.
The recipients of the new licenses – Arkansas Capital Corporation, Alaska Growth Capital BIDCO, Inc., and Funding Circle – focus on historically underserved markets. They will play a significant role in supporting the SBA’s ongoing efforts to increase access to affordable capital for business owners in underserved markets across America. This initiative aligns with the Biden-Harris Administration’s agenda to advance equity and foster an inclusive economy.
Administrator Isabel Guzman emphasized the importance of small businesses to the American economy, stating, “The success of America’s 33 million small businesses is a pillar of Bidenomics and foundational to the prosperity of our economy, global competitiveness, and democracy.” She further noted that “Persistent barriers to capital, especially small-dollar loans, still pose a challenge to many of the entrepreneurs who power our economy.”
The three new SBLC licenses, approved by the SBA in June, aim to increase responsible small business lending. By utilizing government guarantees, these licenses reduce the level of risk to lenders and cost to borrowers, thereby facilitating increased loan volumes for small businesses.
With the addition of these three SBLCs, the total number of such entities has risen to 17. This expansion is set to bring capital to new underserved markets such as Native, rural, and low-income communities, broadening the reach of financial support for small businesses.
This development builds on the SBA’s modernization of its loan programs, which includes streamlining credit criteria and cutting red tape for SBA lenders. The SBA’s loan programs are being modernized to make them more accessible and efficient for both lenders and borrowers.
Arkansas Capital Corporation, Alaska Growth Capital BIDCO, Inc., and Funding Circle specialize in providing capital to historically underserved markets. Their inclusion in the SBLC program is expected to boost access to funding opportunities for small businesses in these communities.
The Biden-Harris Administration’s efforts to ensure more small business borrowers have access to funding opportunities with reduced risk and cost underscore their commitment to fostering an inclusive economy. The expansion of the SBA’s SBLC program after more than forty years is a significant step forward in this commitment.
By expanding the SBLC program and modernizing its loan initiatives, the SBA continues to demonstrate its dedication to supporting America’s small businesses, particularly those in underserved markets. This move not only bolsters the nation’s economy but also promotes equity and inclusivity in the business sector.
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