The Small Business Administration on Tuesday began limiting the weekly volume of its largest program to $80 million because of limited funds.
The curb was not supposed to start until the second week of June, but Congress last week waived the 15-day notification requirement at the request of SBA Administrator Aida Alvarez.
Ms. Alvarez blamed the 15-day warning period for the failure of the $500,000 cap she imposed in May on the 7(a) loans, which are 75% to 80% guaranteed by the agency. During the notification period, lenders rushed through $1 billion in loans.
SBA will keep the $80 million weekly limit until the agency and Congress determine a permanent solution to the funding problem. Within that ceiling, SBA will set limits for each of its 67 district offices and 400 preferred lenders based on lending patterns since late 1993.