The Credit Union National Association (CUNA) is offering its support for a measure that the organization says would prevent direct lending from the Small Business Administration (SBA) 7 (a) Loan Program.
CUNA noted that HR 6307 was presented by Representative Blaine Luetkemeyer (R-MO) and forwarded correspondence detailing the benefits of the bill. Loans made through program 7 (a) are guaranteed by the federal government up to 85%, with the government guaranteed portion of the loan not counted towards the limit on loans to companies that are members of a credit union.
“This public-private partnership works because borrowers can get loans from financial institutions they know well and have a vested interest in the success of their borrowers,” CUNA wrote. “Additionally, when working with local lenders, small businesses are likely to benefit from the guidance and experience of a lender with the goal of helping the borrowing business succeed. “
CUNA said the organization has also shared its concerns with the House Small Business Committee on the matter, while urging that the Small Business Administration (SBA) direct lending language be omitted from the legislation on reconciliation.
“By becoming a direct lender to small businesses, the SBA is likely to harm the relationships of local financial institutions with businesses and potentially prevent those businesses from establishing important banking relationships that can only help their business survive and to prosper, “CUNA concluded in its correspondence. .