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SBA establishes Community Advantage recovery loans in response to coronavirus
The Small Business Administration (SBA) yesterday published a request for information (RFI) and a notice on the establishment of a new, temporary community advantage (CA) loan product in response to the coronavirus pandemic. The new loans – the CA recovery loans – will be made only under the CA Pilot Program and will be available to small businesses located in underserved markets.
CA lenders that are eligible to make the CA recovery loans will be notified by the SBA within five days of the published notice and will be provided instructions on how to opt-in to the program if they choose to participate.
The SBA-guaranteed loans will be available through Sept. 27, 2020, and must be fully disbursed no later than Oct. 1, 2020. Comments to the SBA are due Aug. 14.
The CA pilot program was announced in December 2010 as part of the SBA’s efforts to bolster lending to small businesses and entrepreneurs in underserved communities and began accepting applications in February 2011.
NAFCU wrote to the SBA in 2017 to recommend ways in which the agency can reduce its regulatory burden and help credit union members better serve their business members. In the letter, the association called for the reexamination of the CA pilot program to consider allowing credit unions to participate.
In 2019, NAFCU President and CEO Dan Berger and SBA Acting Administrator and General Counsel Chris Pilkerton signed a new Strategic Alliance Memorandum (SAM) aimed at expanding access to credit union small-dollar loans to businesses across the nation.
NAFCU previously signed Memorandums of Understanding (MOU) with former SBA Administrators Maria Contreras-Sweet and Linda McMahon in 2015 and 2017, respectively, and continues to work closely with the SBA to strengthen credit unions' ability to fund loans for small businesses in their communities.