WASHINGTON – President Biden’s Fiscal Year 2025 budget request, announced at the beginning of March, includes a proposal to allow the Small Business Administration (SBA) to make direct loans through the 7(a) lending program. This ill-conceived proposal would manipulate markets by enabling the government to rival banks and credit unions in providing loans.

U.S. Senator Kevin Cramer (R-ND) joined U.S. Senators Tim Scott (R-SC) and John Kennedy (R-LA) in reintroducing the Protecting Access to Credit for Small Businesses Act to prohibit the Biden administration from authorizing the Small Business Administration to issue direct 7(a) loans. Not only would a SBA 7(a) direct lending program jeopardize access to capital for small businesses, it would undermine the agency’s existing public-private partnership loan programs.

“The proposal to allow the SBA to directly make loans under the 7(a) lending program is a glaring example of the Biden administration undercutting the private sector,” said Senator Cramer. “Protecting access to credit for small businesses is critical and we must prevent the federal government’s blatant attempt to control the direct lending space.”

“When acting as a direct lender, the SBA has a consistent history of failure and inefficiency when compared to the private sector,” said Senator Scott. “The administration’s proposal is just a vehicle for a big government overreach into nearly all aspects of American life and private institutions. There’s simply no reason to use the federal government to funnel tax dollars that will later be loaned back to small businesses.”

“Fraud and inefficiency characterize the Small Business Administration’s history in direct lending. The government shouldn’t crowd out private lenders that are already doing a good job getting funds to the small businesses that need them,” said Senator Kennedy. “I’m proud to partner with Sen. Scott to stop the SBA from replacing private lenders and those in our communities with Washington bureaucrats.”

Organizations supporting the legislation include America’s Credit Unions, the Bank Policy Institute, the Independent Community Bankers of America, the Consumer Bankers Association, and the American Bankers Association.

Additional cosponsors include U.S. Senators Jim Risch (R-ID), Chuck Grassley (R-IA), Steve Daines (R-MT), James Lankford (R-OK), Joni Ernst (R-IA), John Cornyn (R-TX), Tom Cotton (R-AR), Rick Scott (R-FL), and Mike Braun (R-IN).

Click here for bill text.