On May 17th the House Small Business Committee convened a hearing entitled, SBA’s 7(a) Loan Program: A Detailed Review in which SBA representatives Linda Rouche, Director of Credit Risk Management (OCRM) in the Office of Capital Access and Bill Manger Associate Administrator provided witness testimony.
The tandem provided to the committee a high level overview of the state of play for the flagship lending program at SBA. If you recall in one of our early updates from this year, Mr. Manger was recently appointed by the Administrator McMahon to take the helm as Associate Administrator in charge of Capital Access. Manger provided the perspective and direction of the Trump Administration and his boss Administrator McMahon while Rouche, a seasoned career professional at SBA gave technical account of OCRM’S portfolio, here are some of the highlights.
“As of March 31, 2017, OCRM monitored a portfolio of 3,654 lenders that provide 7(a) guaranty financing in excess of $82.3 billion and 228 Certified Development Companies (“CDCs”) responsible for approximately $26.8 billion in 504 debenture guarantees. This includes supervision of 14 Small Business Lending Companies (“SBLCs”), 27 Non-Federally Regulated Lenders (“NFRLs”) and over 100 Community Advantage Lenders”
Mr. Manger credited the committee for assisting in raising the FY 2017 lending authority from $26.5B in FY 2016 to $27.5B in the FY 2017 appropriations package that was passed by the Congress earlier in the month and provide assurance that though SBA has seen significant growth this year in demand, the agency is not in jeopardy of exceeding that lending capacity.
Manager concluded by reiterating the recommendation his boss delivered to Chairman Chabot and the committee during her testimony in March to grant the SBA Administrator circumstantial authority to raise borrowing capacity.
“ to ensure that America’s small businesses can fully benefit from the tools and resources provided by the SBA and that this support continues through the year uninterrupted, the Administrator supports proposed legislation that would grant circumstantial authority to the Administrator to increase 7(a) lending authority by 15 percent when program subsidy is zero and appropriate notice is provided to Congress. The flexibility offered by the proposed statutory provision would offer greater certainty to our 7(a) lending partners and make additional assistance available to small businesses at no additional subsidy cost to the taxpayer.”