Financial technology (fintech) lenders would be able to access certain federal small business loans under bipartisan legislation introduced by U.S. Sen. Tim Scott (R-SC).
The Expanding Access to Credit for Small Business Act, S. 2690, which Sen. Scott sponsored on Aug. 10 with lead original cosponsor U.S. Sen. John Hickenlooper (D-CO), would increase criteria of the Small Business Administration’s (SBA) 7(a) small business loan program to include fintech lenders, which are part of an emerging industry that uses technology to improve activities in finance.
“As a former small business owner, I know all too well the barriers to entry that prevent entrepreneurs from opening up shop,” said Sen. Scott. “The Expanding Access to Credit for Small Business Act is just one step we can take to ensure minority communities and folks in rural America have just as much access to the American Dream as anyone else.”
If enacted, S. 2690 would lift the moratorium on Small Business Lending Company (SBLC) licenses; re-appropriate unused COVID-19 pandemic funds from various stimulus bills to the SBA, which would oversee the new SBLCs; and require the administrator to check for financial soundness and compliance when considering new applicants to the program, according to a bill summary provided by Sen. Scott’s office.
The measure has received support from the Electronics Transactions Association, the Innovative Lending Platform Association, and the Bipartisan Policy Center.