Unfortunate news was released Thursday, July 23rd from the Small Business Administration (SBA) stating the $18.75 billion cap was reached at noon and therefore halting the funding of all remaining loan applications for the remainder of the 2015 fiscal year. The SBA did expect to reach the cap by late August, however it has come early this month.
The 7(a) Loan has provided under-served communities including woman, Latinos and veterans. The SBA announced they are urging congress to increase lending authority for the program. “SBA recognizes that any lapse in the 7(a) loan program would impact thousands of entrepreneurs and businesses who rely on the program to overcome the inability to otherwise secure the credit necessary to start or expand their business,” the agency said in a newsletter.
If the cap were to stay put with no raise of the limit, loans under the program would not become available again until October 1st. However those who have submitted applications before the cap will continue to go through the process up to the point of approval and placed into a queue until the end of the year, which whom will be granted loans first. This will create a delay at the beginning of the fiscal year for the SBA program if the limit is not raised soon.
On a brighter note, with the cap increasing from the previous year and reaching it before year end, it is an indication of a growing small business economy.
However there is an alternative solution, financing from private lenders. Lenders are not affected by the SBA and have billions in the US available for small businesses. We, Innovative Lease Services (ILS) are a private lender and can provide each business the potential financing amounts of $5K to $5Million. For more information and product offerings, please visit our website ->