The House approved a bill Tuesday that gives the administrator of the Small Business Administration discretion to increase the lending authority of the agency’s flagship 7(a) loan guarantee program by 15% in periods of high demand.

SBA officials have been seeking authority for emergency increases for several years. While there is little indication 7(a) is in danger of reaching its lending limit during the current fiscal year, it has experienced several shutdowns in the recent past.

In July 2015, 7(a) was shuttered for a week when lending activity reached the annual limit, more than two months before the end of the federal government’s fiscal year. In that case, Congress had to rush to add nearly $5 billion of emergency funding authority.

The legislation, HR 4743, also would codify the existence of the SBA’s Office of Credit Risk Management and would require it to undertake an annual risk assessment of the 7(a) portfolio. It also updates the wording of the “credit elsewhere test” that lenders must apply to each loan in order to receive a 7(a) guarantee.

Moreover, the bill would establish an appeals process for lenders to contest enforcement actions.

Banking trade groups have signaled strong support for the bill. The American Bankers Association, Independent Community Bankers of America and Consumer Bankers Association each issued statements thanking lawmakers for advancing the bill, which still requires Senate passage.

“I applaud the bipartisan work [the House Small Business Committee] and the full House has done to safeguard America’s 30 million small businesses,” Rep. Steve Chabot, R-Ohio, said Tuesday. Chabot had introduced the bill in January.

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