The Small Business Administration has been broadcasting its success this year in helping SMEs in the U.S. find funding, but that headway came to an abrupt halt last month when the agency announced that it would have to stall its lending practices because it had reached its annual cap of $18.75 billion.
Luckily, the lending pause didn’t last long. On Wednesday (Aug. 19) an announcement in JD Supra revealed that its lending program has resumed operations following President Obama’s signing of a new bill that raises its lending cap.
The White House lifted the maximum lending limit by the SBA to $23.5 billion last month, according to reports, and now the SBA can continue its small business financing under the 7(a) lending program. President Obama signed the bill into law on July 23, according to reports.
Despite policymakers working to shorten the lending halt as much as possible, reports said the lapse was still cause for concern for many small business owners in the nation.
“While the Senate was quick to pass legislation approving an increase to the cap,” reports said, “that did not quell the fear and anxiety felt by small business groups over the possibility of congressional inaction and the detrimental impact it could have on small business owners and entrepreneurs.”
According to the announcement, the SBA said it would continue to work with Congress to avoid future disruptions to its lending operations.
When the SBA reported nearing its lending cap, analysts had begun to wonder whether traditional banks would step in for the agency’s loan stoppage. Small business loan demand continues to rise, and according to the most recent data, institutional lenders have been taking the lead in filling that need in addition to the popular SBA lending program.
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