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SBA’s 7(a) Program Authorized for $26.5B in FY2016
Tuesday, December 22, 2015 6:45 AM

The Small Business Administration’s 7(a) loan program is authorized for a total of $26.5 billion in fiscal year 2016, an increase of $8 billion, per the government funding bill that was signed into law last week by President Barack Obama.

The SBA 504 program, for real estate and equipment, has been authorized for $7.5 billion for fiscal year 2016.

The SBA’s 7(a) loan program allows the agency to guarantee up to 85 percent of a loan. For credit unions, this means the SBA-guaranteed portion of a member business loan does not count against the statutory cap of 12.25 percent of assets.

Credit unions saw a number of successes related to the 7(a) program in 2015, including HawaiiUSA FCU, Honolulu, being named a top SBA lender. In its first year with an SBA program, HawaiiUSA delivered 218 loans with a total volume of $6.98 billion, the first time a lender in the Hawaii District Office has ever crossed the 200-loan threshold.

The National Credit Union Administration and the SBA entered into a partnership in February designed to provide more capital to small businesses.

The 7(a) program was authorized for $18.5 billion for fiscal year 2015, a cap it hit in July, causing the SBA to suspend lending through the 7(a) program. It was re-authorized by the end of July for a cap of $23.5 billion for the fiscal year ending Sept. 30, 2015.