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Analysis of SBA's SBLC Proposed Rule - December 2022

Memorandum on the Small Business Administration’s Small Business

Lending Company Moratorium Rescission and Removal of the Requirement for a Loan Authorization


This document provides an analysis on the proposed rule issued by the Small Business Administration (SBA), on November 7, 2022, to lift the moratorium on licensing new Small Business Lending Companies (SBLCs) and add a new type of entity called a Mission-Based SBLC. In addition, the SBA is also proposing to remove the requirement

for a Loan Authorization. Comments on this proposed rule must be submitted to www.regulations.gov on or before January 6, 2023.


The rule impacts a few key groups: CA lenders, prospective licensees, and existing 7a providers.


CA Lenders: The new “mission based” definition will allow all CA lenders to receive SBLCs. This effectively gives them permanent lending authority while the CA pilot is slotted to end in 2024.


Prospective Licensees: For decades, there have been no new licenses, leaving transfers or acquisitions to attain them. This would allow for approximately 3 new licenses for for-profit (non-mission based) companies. This has been a priority for many non-depository companies working with small businesses, including the “FinTech” community. There will be eager competition for the new licenses, though it is unclear if 17 will be the new 14.


Existing 7a Providers: The rule also removes a duplicative paperwork requirement.


Read the full analysis below.


Analysis of SBA's SBLC Proposed Rule
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