Project 2025 Tracker / What’s done, what’s next

25. Small Business Administration · Notable

Rein in SBLC expansion and outsource where private expertise fits

Partially done

759 25. Small Business Administration

“For example, the SBA wants to expand the number of licensed Small Business Lending Companies (SBLCs), implement a new “Mission-Based SBLC,” and remove a requirement for loan authorization within the 7(a) and 504 Loan programs and rely solely on a lender’s documents. … A conservative Administration should rein in these idealistic and impractical efforts, get current programs under control and properly staffed with people who can manage and perform competently, and outsource efforts where private-sector expertise is appropriate and more efficient.”

What has happened

  1. Partially done

    SBLC licensing itself has not been reined in, only the mission-based category: the SBA granted Siemens Small Business Lending an SBLC license, making it the 16th approved non-bank SBA lender and the first industrial technology company to hold one, on the footing that it will prioritize manufacturing, energy, healthcare, logistics and technology borrowers. The agency presents it as private-sector expertise being brought in, which is the third limb of the Quote; it is also an expansion of the licensed SBLC population the Quote asks to restrain. The Quote's remaining object — restoring the loan authorization requirement in the 7(a) and 504 programs — has not been addressed, and reading the SOPs rather than counting keywords in them makes that firmer rather than weaker. What replaced the SBA-drafted loan authorization is described in both SOPs in the same paragraph: "The E-Tran Terms and Conditions is the digital loan guaranty authorization request by the Lender to SBA to authorize the Lender to make the loan with an SBA guaranty under the terms and conditions submitted in E-Tran" — the Lender's request, not SBA's document — and "SBA does not require signatures on the terms and conditions". SOP 50 10 8.1 changes only the platform, renaming it "the SBA Terms and Conditions" delivered through "the SBA Loan System". So no lender-document-independent authorization step has been restored under another name; the 2023 rule that removed the requirement (88 FR 21890) stands.

  2. Partially done

    The SBA reinstated the moratorium on approving new Community Advantage Small Business Lending Company licenses — the "Mission-Based SBLC" the Quote names — effective immediately, and tightened the terms on which the existing ones may keep lending. The release records the program's 7% twelve-month default rate, more than double the overall 7(a) portfolio, and multiple lenders with early problem loan rates above 30%, and notes that the Biden SBA had approved more than 140 new unregulated lenders in 2023. The instrument behind it, which the release describes but does not link, is **SBA Policy Notice 5000-868068**, effective 2025-05-05, replacing SOP 50 56 1 Section A, Chapter 2.C. It sets two distinct requirements the release runs together: a *loan loss reserve* of 5 percent of the unguaranteed portfolio for CA SBLCs with five years' participation or fewer, and the lender's own trailing 36-month repurchase rate for older ones; and a *capital requirement* of unencumbered paid-in capital and surplus of at least $375,000 or 10 percent of its share of outstanding loans from 2025-05-15, rising to $750,000 or 10 percent from 2026-05-15. It also caps CA SBLC loans at $350,000, keeps the 60 percent underserved-market requirement from the sunset pilot, and declines to set fidelity insurance levels "at this time". Two things worth knowing about it: the notice carries its own expiry, "EXPIRES: 5/1/26", and no successor notice or SOP 50 56 2 has been published — so the $750,000 step took effect a fortnight after the instrument imposing it lapsed on its face.

  3. Partially done

    The SBA began getting the 7(a) program back under control, which is the second limb of the ask. It restored the lender fees the previous administration had waived — $460 million uncollected from 2022 to 2024, against a $397 million negative cash flow in FY2024, the first in thirteen years — and announced further changes to restore the program's zero-subsidy status. On 2025-04-22 it followed with SOP 50 10 8, rejecting the "Do What You Do" underwriting standard and reverting lending criteria to the pre-2021 rules.

Research log

What was searched, and what didn’t count as evidence

Research notes

  • Three limbs, two of them moved and one not, so partial throughout rather than done.
  • The loan-authorization limb was checked in the operative document rather than inferred: the .docx of SOP 50 10 8 and SOP 50 10 8.1 were downloaded from https://legacy.sba.gov/document/sop-50-10-lender-development-company-loan-programs and searched. Neither restores a 7(a) loan authorization requirement.
  • The Community Advantage moratorium was found by the pp. 749–753 pass while researching #2035 and correctly assigned to this item; it is cited here with its own reading.
  • The Federal Register carries none of this: “SBLC”, “Small Business Lending Company”, “Mission-Based”, “Community Advantage” and “loan authorization” return zero hits across fr-rule, fr-prorule and fr-notice for the window. The SBA runs its lending policy through SOPs and procedural notices, which is why the press index and the SOP itself are the record.
  • Read-queue ticket 07, 2026-09-06. The row asked three questions of the documents themselves rather than of a keyword count. (i) Does SOP 50 10 8 restore a lender-document-independent authorization step under another name? No — the successor construct is the E-Tran / SBA Terms and Conditions, quoted in the 2026-06-17 event, and it is expressly the lender’s request rather than an SBA instrument. Searched in the .docx for “Loan Authorization”, “Authorization Wizard”, “SBA Authorization” and “Terms and Conditions”: zero for the first three in both SOP 50 10 8 (1,052,105 characters of extracted text) and SOP 50 10 8.1 (912,389). (ii) What does the Community Advantage capital-reserve requirement actually say? Policy Notice 5000-868068, now cited on the 2025-05-19 event; note that “capital reserve” — the release’s phrase — appears nowhere in any SOP 50 10 version, because the requirement lives in the SOP 50 56 series and was changed by notice. (iii) Has the moratorium been lifted or extended? Only the Community Advantage one was ever reinstated. The general SBLC licensing moratorium was rescinded by final rule in 2023 and has not returned: the SBA’s complete Federal Register output from 2025-01-20 to 2026-09-06 is 515 documents, of which 20 are rules or proposed rules, and none of them touches SBLC licensing, the moratorium or 13 CFR 120.470–120.490. The Siemens license of 2026-06-17 is the agency acting under the rescinded moratorium, and the published SBLC roster (legacy.sba.gov/document/support-small-business-lending-companies-sblcs, “List current as of 3/20/2026”) is the standing record of who holds one.
Action
restrict
Object
SBLC expansion, the Mission-Based SBLC, and removal of the 7(a)/504 loan authorization requirement
ID
2072