Report: SBA loans hit lending cap

(Updated 1:26 p.m.) The U.S. Small Business Administration’s 7(a) loans hit their annual lending cap of $18.75 billion this week, and the agency has instituted a waiting list for new loans as a result, The Business Journals reported.
Meanwhile, Congress is being asked by SBA officials, lenders and small business groups to raise the program’s authorization to $23.5 billion to free up loans for small businesses.
A spokesman for the Rhode Island office of the SBA said that he’s been told that additional funds should be forthcoming. The House of Representatives is expected to vote on raising the cap on Monday; the Senate already approved raising the authorization to $23.5 billion.

Thirty-two commercial lenders made 392 7(a) loans guaranteed by the SBA worth $67.6 million during the fiscal year that ended Sept. 30 to Rhode Island businesses, according to the SBA.

The Business Journals reported that demand for the program is high because the loans, which are government-guaranteed, are the main source of long-term loans, which feature lower monthly payments, for small businesses.
In anticipation of the cap being reached, lenders have been rushing to get loans processed. More than five times the normal volume has been processed since the beginning of the month, the article states.

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