Statement from Innovative Lending Platform Association CEO Scott Stewart regarding Sens. Scott (R-SC) and Hickenlooper (D-CO) Introducing the Expanding Access to Credit for Small Businesses Act.
WASHINGTON – August 11, 2021 Scott Stewart, CEO of The Innovative Lending Platform Association (ILPA) — the leading trade organization for online financing and service companies serving small businesses — released the following statement regarding the introduction of the Expanding Access to Credit for Small Businesses Act.
ILPA commends Sens. Tim Scott (R-SC) and John Hickenlooper (D-CO) for their leadership in introducing the Expanding Access to Credit for Small Businesses Act, bipartisan legislation to remove a decades-old moratorium blocking new lenders from participating in the Small Business Administration (SBA) 7(a) program. Repealing the moratorium would leverage the distribution, technology and scale of non-depository state licensed and regulated national Fintech lenders, including CDFIs, to expand access to capital for America’s small businesses, particularly those in the most underserved communities. As evidenced by the Paycheck Protection Program, Fintech and CDFI lenders served borrowers who would not have received loans otherwise, were more likely to lack banking relationships, be minority owned, and have fewer employees.
When additional digital lenders are permitted to offer 7(a) loans nationwide, more financial institutions will invest in small businesses due to the reduced risk provided by the government guarantee, younger and higher credit risk businesses will gain access to affordable credit, more rural small businesses will have easier access to more lenders, lenders will be able to offer lower rates and longer terms to small businesses which cumulatively means a quicker, more equitable economic recovery and economic expansion for main street.
Small Business Administrator Isabel Guzman said “the adoption of Fintech across the banking sector as well as with these new Fintech companies and our CDFIs is really critical and expanding distribution for capital will improve access and so I look forward to partnering with lending institutions broadly to ensure we can keep them engaged in SBA programs, this has been a record high number of lenders engaged in SBA than ever before and I think we need to take advantage of that”. This bill gives the SBA the resources it needs for a successful public private partnership to expand access to credit for America’s small businesses.
ILPA is committed to helping this legislation become signed into law as quickly as possible.