U.S. Small Business Administration Grants Funding Circle 7(a) SBLC License
01 Novembre 2023 - 3:35PM
Business Wire
Funding Circle to offer small businesses
government guaranteed SBA 7(a) loans nationwide
Funding Circle (LSE: FCH), the leading online platform for small
business loans, announced today that we have received a formal
notice from the US Small Business Administration (SBA) that our
application has resulted in a tentative award for an SBA Small
Business Lending Company (SBLC) license to participate in its
flagship 7(a) small business loan program1.
The SBA’s decision to grant Funding Circle one of the first SBLC
licenses since 1982 is part of the Biden-Harris Administration’s
efforts to modernize the agency and address persistent gaps in
access to capital impacting small business owners and to grow the
economy. The announcement follows recent research published by the
Philadelphia Federal Reserve and Bank for International Settlements
that found Funding Circle is “increasing access to capital at a
lower cost for borrowers who are less likely to receive credit from
traditional banks” and “predicting future loan performance more
accurately than the conventional method to credit scoring, leading
to better loan performance.”
“We are excited to help more small businesses in the U.S. get
the funding they need to win,” said Steve Allocca, Managing
Director at Funding Circle U.S. “By leveraging our advanced data
and technology platform and providing a superior customer
experience, Funding Circle is well positioned to become the #1 SBA
lender in the country for 7(a) Small Loans under $500,000 by
providing creditworthy small businesses in low-moderate income
neighborhoods and rural areas access to affordable capital to
start, run and grow their businesses.”
More than 50% of banks have imposed stricter lending criteria on
small businesses with half of entrepreneurs seeking credit
encountering funding shortfalls or receiving the full amount
sought. This credit crunch disproportionately affects
minority-owned enterprises, with 51% of Black-owned, 40% of
Hispanic-owned, 36% of Asian-owned, and 30% of White-owned
businesses experiencing financial hurdles due to limited credit
availability.
The SBA 7(a) program, which guarantees up to $36 billion a year
in small business loans up to $5 million, currently sees
participation from relatively few of the 11,000 banks and credit
unions in the United States. 25 lenders are responsible for 50% of
all 7(a) loans, averaging around half a million dollars—neglecting
the crucial need for smaller loans to small and underserved
businesses. 77% of Funding Circle loans are for less than $150,000,
33% go to businesses in low-moderate income neighborhoods and 40%
to businesses in rural areas.
By expanding lender participation and streamlining the program
requirements under $500,000 to leverage technology and more closely
mirror the private sector’s policies and procedures, the SBA is
making it more efficient to get more small loans in the hands of
small and underserved small businesses.
Funding Circle will begin offering SBA 7(a) Small Loans in 2024.
Small businesses seeking financing up to $500,000 can visit
www.fundingcircle.com to apply online in a matter of minutes.
About Funding Circle US
Funding Circle (LSE: FCH) is a leading online lending platform
for small business borrowers. Since 2010, Funding Circle has
originated $4.5 billion to 45,000 small businesses in the U.S. and
$21.1 billion to 143,300 small businesses globally.
1 Funding Circle will be permitted to begin originating 7(a)
loans once all lender oversight requirements are met to the
satisfaction of SBA and upon receipt of an executed Form 750, a
Small Business Administration Loan Guaranty Agreement.
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version on businesswire.com: https://www.businesswire.com/news/home/20231031863839/en/
Media Contacts: Funding Circle: Ryan Metcalf
pr@fundingcircle.com
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