SBA

After the departure of a key Small Business Administration official, lawmakers from both parties are calling on the SBA's chief to delay rules that could open the agency's biggest lending program to more nonbanks — or even consider reversing the changes.

BayFirst Financial, which says it lost $1.6 million when a planned Small Business Administration loan sale to Signature fell through, plans to file a claim for the lost revenue with the Federal Deposit Insurance Corp.

Rep. Roger Williams, chairman of the House Small Business Committee, says Small Business Administration is considering allowing borrowers to self-certify eligibility for loans, a step some believe could lead to more fraud. The agency declined to say whether that is one of the changes it's considering.

The proposal to streamline the Small Business Administration's signature program and expand the number of available lending licenses would benefit underserved communities.

A 40-year-old limit of just 14 nondepository 7(a) lenders is set to expire May 12 despite concerns by lawmakers and opposition from banks and credit unions.

In its first three months as a bank, the Boca Raton, Florida-based NewtekOne doubled the size of its deposit base by relying almost exclusively on certificates.

Rep. Nydia Velazquez, D-N.Y., the House Small Business Committee's ranking Democrat, said she'd like to see the Small Business Administration delay opening its flagship loan guarantee program to more nondepository lenders until it sorted out growing concerns about Paycheck Protection Program fraud.

The agency's blueprint calls for giving lenders added underwriting flexibility, as well as upping the number of for-profit nondepository small-business lending companies, which has been capped at 14 since the early 1980s

Some lenders to companies owned by women, minorities and veterans say they'd prefer that the Small Business Administration strengthen its Community Advantage program rather than bring them into the agency's flagship loan-guarantee program.

The Small Business Administration must be prepared to effectively oversee any new lenders it allows in its flagship 7(a) loan guarantee program to guard against fraud and other risks, Democrats and Republicans on the Senate Small Business Committee warned.