[Federal Register Volume 89, Number 154 (Friday, August 9, 2024)]
[Rules and Regulations]
[Pages 65174-65179]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-17644]
=======================================================================
-----------------------------------------------------------------------
SMALL BUSINESS ADMINISTRATION
13 CFR Part 120
RIN 3245-AH92
Small Business Lending Company Application Process
AGENCY: U.S. Small Business Administration.
ACTION: Notification.
-----------------------------------------------------------------------
SUMMARY: The purpose of this notification is to announce that the U.S.
Small Business Administration's (SBA) Office of Capital Access (OCA) is
opening the application period for new Small Business Lending Companies
(SBLC) licenses from September 2, 2024, to October 15, 2024, and share
the process by which interested entities may apply. SBA is similarly
opening the application period for Community Advantage SBLCs (CA SBLCs)
from September 2, 2024, to December 20, 2024, and will be reviewing and
decisioning CA SBLC licenses on a rolling basis.
DATES:
Applicability date: This notification is applicable beginning
August 1, 2024. SBA will accept applications for:
--New SBLC licenses from September 2, 2024-October 15, 2024.
--New CA SBLC licenses from September 2, 2024-December 20, 2024.
Comment date: Comments must be received on or before September 9,
2024.
ADDRESSES: You may submit comments, identified by SBA docket number
SBA-2024-0011, by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov/.
Follow the instructions for submitting comments.
Mail: Jihoon Kim, Office of Financial Program Operations,
U.S. Small Business Administration, 409 Third Street SW, Washington, DC
20416.
Hand Delivery/Courier: Darrel Eddingfield, Office of
Financial Assistance, U.S. Small Business Administration, 409 Third
Street SW, Washington, DC 20416.
SBA will post all comments on https://www.regulations.gov.
If you wish to submit confidential business information (``CBI'')
as defined in the User Notice at https://www.regulations.gov, please
submit the information to Jihoon Kim, Office of Financial Program
Operations, U.S. Small Business Administration, 409 Third Street SW,
Washington, DC 20416; or send an email to [email protected]. Highlight
the information that you consider to be CBI and explain why you believe
SBA should hold this information as confidential. SBA will review the
information and make the final determination as to whether it will
publish the information.
FOR FURTHER INFORMATION CONTACT: Jihoon Kim, Director, Office of
Financial Program Operations (OFPO), Office of Capital Access, Small
Business Administration, at 202-205-6024 or [email protected]. The
phone number above may also be reached by individuals who are deaf or
hard of hearing, or who have speech disabilities, through the Federal
Communications Commission's TTY-Based Telecommunications Relay Service
teletype service at 711.
SUPPLEMENTARY INFORMATION:
I. Background Information
Section 7(a)(17) of the Small Business Act states that SBA shall
authorize lending institutions and other entities, in addition to
banks, to make 7(a) loans. To this end, SBA has authorized Small
Business Lending Companies (SBLCs) as defined in 13 CFR 120.10 to
participate in the 7(a) Loan Program. On April 12, 2023, SBA published
the Final Rule on Small Business Lending Company (SBLC) Moratorium
Rescission and Removal of the Requirement for a Loan Authorization (88
FR 21890, effective May 12, 2023). Through that rule, SBA lifted the
self-imposed moratorium on licensing new SBLCs and established the plan
to approve three SBLCs in the first year following implementation. An
SBLC, as defined in 13 CFR 120.10, is a non-depository lending
institution authorized by SBA to make loans pursuant to section 7(a) of
the Small Business Act and loans to Intermediaries in SBA's Microloan
program. An SBLC is:
Supervised and examined solely by SBA at the federal
level;
Subject to additional SBA Loan Program Requirements, as
defined in 13 CFR 120.10, including but not limited to regulations
specific to SBLCs regarding formation, capitalization, and enforcement
actions; and
Subject to all other 7(a) Loan Program Requirements
specific to origination, servicing, and liquidation.
[[Page 65175]]
This SBLC moratorium was put in place in 1982, prior to access to
modern digital tools that enhance oversight and mitigate risk. For 42
years, SBA has overseen the application and approval process 60 times
for the transfer of the existing SBLC licenses by determining the
capability and experience of the acquiring entity's leadership; the
financial capacity to make, service, and liquidate loans; and the
safety and soundness of its portfolio. This ensures compliance with
SBA's regulatory requirements and origination of loans based on
standards consistent with similarly sized commercial loans made by
other lenders.
As stated above, the purpose of this notification is to announce
that SBA's Office of Capital Access is opening the application period
for new SBLC and CA SBLC licenses. SBA introduced the CA SBLC license
to meet the credit, management, and technical assistance needs of small
businesses in underserved markets. CA SBLC licenses provide mission-
oriented lenders, primarily nonprofit financial intermediaries focused
on economic development, access to 7(a) loans. CA SBLC's goals are to:
Increase access to credit for small businesses located in
underserved markets;
Expand points of access to the SBA 7(a) loan program by
allowing non-traditional, mission-oriented lenders to participate;
Provide Management and Technical Assistance (M&TA) to
small businesses as needed; and
Manage portfolio risk.
II. New Licenses Awarded
SBA will award up to three new SBLC licenses and an indefinite
number of new CA SBLC licenses. SBA may award new SBLC and CA SBLC
licenses for a period of 1 year after the application period ends. SBA
reserves the option to request updated information. SBLC licensees may
make loans nationwide up to $5 million per borrower. SBA will limit CA
SBLCs to certain geographic areas and loan amounts. SBA will also
require CA SBLCs to make at least 60 percent of their loans to eligible
small businesses in underserved markets.
III. SBLC Requirements
SBLCs must comply with SBA's requirements for SBA Lenders, SBA
Supervised Lenders, and the additional requirements presented in 13 CFR
part 120, subpart D, Sec. Sec. 120.470 through 490 specifically for
SBLCs.
SBLCs are subject to the requirements in SOP 50 56 1, Lender
Participation Requirements, Section A, 7(a) Lender Participation,
Chapters 1 and 2., and once tentatively approved, must fulfill SBLC
requirements, including:
1. Submit to the D/OCRM via [email protected] for review their
policies for the following which must be acceptable to SBA in its
discretion:
a. Policies that demonstrates compliance with title 13 of the CFR
and SBA's Standard Operating Procedures (SOPs) for origination,
servicing, and liquidation of 7(a) loans, including but not limited to
policies on credit underwriting, hazard and other insurances (e.g.,
product liability, dram shop/host liquor liability, disability,
workers' compensation, malpractice, etc.), flood insurance, life
insurance, equity, equity injection, verification of equity injection,
collateral, owner/guarantor analysis (including the SBLC's policies on
requiring owner financial statements), how the SBLC will verify an
Applicant's financial information, and how the SBLC will document the
refinancing of any debts.
b. Fees and interest rates, including frequency of interest rate
adjustments, the SBLC charges to its Applicants/Borrowers.
c. Contents and maintenance of a complete loan file.
d. Closing documentation, including how the SBLC documents
disbursements and verification of equity injection.
e. Borrower's access to funds.
f. For SBA Express, Export Express, CAPLines, and EWCP programs,
the SBLC's policies demonstrating compliance with the additional
program-specific requirements stated in SOP 50 56 1, Section A, Chapter
2, Paragraph A.f.-h.
2. Submit to the D/OCRM via [email protected] for review and
approval annual validation, with supporting documentation and
methodologies demonstrating that any scoring model used by the SBLC is
predictive of loan performance.
3. Each SBLC's board of directors must adopt and fully implement an
internal control policy that provides adequate direction to the
institution for effective control over and accountability for
operations, programs, and resources. The board-adopted internal control
policy must, at a minimum, comply with 13 CFR 120.460. For example:
a. The internal control policy implemented must ensure satisfactory
monitoring and management of the SBA loan portfolio, including but not
limited to, providing for a periodic loan review function to be
performed at least annually by a person who is not directly or
indirectly responsible for loan making or by outside contractors.
b. It must include a list of monthly reports provided by the SBLC's
management for Board review to support adequate Board oversight.
c. It must provide for internal controls for loan making, servicing
and liquidation.
d. It must provide for a risk rating system to risk classify SBA
loan assets satisfactory to SBA.
e. Internal control policies and procedures must include provisions
to ensure compliance with SBA's Loan Program Requirements on
eligibility.
f. Internal control policies and procedures must include provisions
to ensure the SBLC exercises due diligence and prudent oversight of its
third party vendors, including Lender Service Providers (LSP) and other
loan Agents. Such policies and procedures should include, but not be
limited to, monitoring performance of loans referred by an Agent or
where an Agent provided assistance.
g. SBLCs must provide documentation demonstrating that the internal
control policies and procedures are fully implemented and followed.
4. SBLCs must adhere to their internal policies and procedures for
originating, closing, servicing, and, when necessary, liquidating SBA
loans. When SBA procedures require Lenders to follow their own policies
and procedures on their similarly sized, non-SBA guaranteed loans,
SBLCs must follow the written policies and procedures that have been
reviewed by SBA.
4. SBLCs may not lend to an Applicant that has received assistance
from an affiliated Small Business Investment Company (SBIC). (13 CFR
120.476)
5. Minimum capital requirements for SBLCs: Beginning on January 4,
2024, each SBLC that makes or acquires a 7(a) loan must maintain, at a
minimum, unencumbered paid-in capital and paid-in surplus of at least
$5,000,000, or ten percent of the aggregate of its share of all
outstanding loans, whichever is greater. Any SBLC approved on or after
January 4, 2021, including in the event of a change of ownership or
control, must maintain the minimum capital requirement set forth in
subparagraph (a) above. Unless subject to subparagraph (a) or (b)
above, an SBLC must comply with the minimum capital requirements that
were in effect on January 3, 2021.
IV. CA SBLC Requirements
CA SBLCs must comply with SBA's requirements for SBA Lenders, SBA
Supervised Lenders, and the additional requirements presented in 13 CFR
part
[[Page 65176]]
120, subpart D, Sec. Sec. 120.470 through 120.490 specifically for CA
SBLCs.
CA SBLCs are subject to the requirements in SOP 50 56 1, Lender
Participation Requirements, Section A, 7(a) Lender Participation
Requirements, Chapters 1 and 2, and once approved, must fulfill
requirements for SBLCs stated above and the following conditions:
1. The CA SBLC must be a nonprofit lending institution.
2. The CA SBLC must maintain the appropriate bond coverage levels
for CA SBLCs, as determined by the SBA Administrator, published in Loan
Program Requirements.
3. The CA SBLC must maintain a minimum amount of capital as
determined at the discretion of the Administrator.
4. The CA SBLC shall maintain a loan loss reserve of 5 percent of
the outstanding amount of the unguaranteed portion of the loan
portfolio of the CA SBLC under the program for the first five years in
the program and shall maintain a loan loss reserve equal to the average
repurchase rate of the CA SBLC over the preceding 36-month period
thereafter.
V. SBLC Application
The entity applying for a new SBLC license must submit an executed
electronic scanned copy (in pdf format) to [email protected] addressing
each of the elements set forth below (``SBLC Application''). The SBLC
application must be complete and organized in tabular format, and the
information submitted must be sufficient to enable SBA to evaluate its
application against the evaluation criteria. The application must
include:
1. The Legal name, address, telephone, and email address of the
proposed SBLC.
2. Identification of the form of organization of the proposed SBLC
along with file-stamped copies of the concern's certificate of
incorporation, certificate of formation or certificate of limited
partnership (as applicable), and a copy of the concern's corporate
bylaws, limited liability company operating agreement, or limited
partnership agreement (as applicable).
3. Identification of the proposed SBLC's capitalization including
the form of ownership, the identification of all classes of equity
capital and proposed funding amounts, rights and preferences accorded
to each class of stock or members interest (including voting rights,
redemption rights, and rights of convertibility) and conditions for
transfer, sale, or assignment of these interests.
4. The proposed SBLC's geographic area of operation.
5. Identification of all officers, directors, managing partners,
managing members, Key Employee(s) of the proposed SBLC, which includes
senior managers, members of loan committees, and individuals who have a
meaningful participation in the direction of the operations, policies,
or financial decisions of the proposed SBLC, and all other individuals
or entities that propose to hold an equity interest of at least ten
percent of the economic interest in any class of stock or ownership
interest in the proposed SBLC (such identification should include a
discussion of any prior SBA experience).
a. An organization chart showing the relationship of the proposed
SBLC with all related Associates (see 13 CFR 120.10, Definitions) and
affiliates within the organization.
b. All individuals or entities identified in this paragraph must
submit an executed SBA Form 1081 and either a Form FD-258 (fingerprint
card) or Electronic Fingerprint Submission. SBA Form 1081 and the Form
FD-258 or Electronic Fingerprint Submission must be signed and dated
within 90 days of submission to SBA.
6. Proof of fidelity insurance coverage as detailed in 13 CFR
120.470(e).
7. A comprehensive business plan that details:
a. The nature of proposed operations, including the organizational
units involved in sourcing, evaluating, underwriting, closing,
disbursing servicing, and liquidating small business loans in the
organization;
b. The identification of all sources of capital used to finance
lending operations;
c. An operations plan detailing the nature of the Lender's proposed
loan activity, the volume of activity projected over the first 3 years
as an SBA Lender, projected balance sheets, income statements and
statement of cash flows of the Lender, with alternative profit and loss
scenarios based on run rates equivalent to 70 percent and 50 percent of
projected loan activity, the type and projected amount of financing
needed to support its lending plan, along with a discussion of Lender's
proposed wind-down plan in the event the Lender decides to leave the
program;
d. A detailed analysis of the Lender's projected secondary market
activities during the first 3 years of operation, including a
sensitivity analysis of the effect any changes in premium from the sale
of the guaranteed portion of 7(a) loans in SBA's secondary market may
have on the Lender's prospective earnings. The analysis must also
include a description of the Lender's plans (if any) to securitize or
sell participations in the unguaranteed portion of 7(a) loans; and
e. If the Lender intends to acquire any 7(a) loans, a written plan
detailing the extent of this acquisition activity in its operating
plan, and how the Lender will manage the transition of the 7(a) loan
portfolio.
8. All documents associated with any type of external financing
expected to be undertaken by the proposed SBLC.
9. A written statement from an authorized official of the proposed
SBLC certifying that the SBLC will not be primarily engaged in
financing the operations of an Affiliate as defined in 13 CFR 121.103.
10. The most recent audited financial statements of the proposed
SBLC if it has been in operation for more than 1 year, or the audited
financial statements of the proposed SBLC's parent company.
11. A certified copy of a Board, limited partners, or members
resolution specifying the individual(s) or official(s) granted the
authority by the organization to submit this SBLC application.
12. A certification by the proposed SBLC that it is in full
compliance with all Federal, State, and local laws.
13. A written legal opinion of independent counsel (``Independent
Counsel'' is counsel that is not an Associate of the lender),
satisfactory to SBA that addresses whether the proposed SBLC:
a. Is duly formed, organized, and validly existing in good standing
under the laws of the State of its organization, and is in full
compliance with all Federal, State, and local laws in connection with
the formation and organization of the proposed SBLC; and
b. Has the power, legal right, and authority to enter into the sale
transaction.
14. A written statement from an authorized official of the proposed
SBLC that the entity intends to operate as an SBA Lender for a period
of not less than three years and that the licensee's significant
deviation from the 3-year business plan, as described in #7 above, may
be subject to corrective action.
VI. SBLC Evaluation Process
SBA reserves the right to deny any entity applying for an SBLC
license, in its sole discretion. In addition to SBA's evaluation of the
elements required in the SBLC Application, SBA may consider additional
factors in its
[[Page 65177]]
evaluation. These factors include, but are not limited to:
The lending policies of the proposed SBLC and their
alignment with SBA's mission;
Historical performance measures (such as default, purchase
and loss rate);
Whether the applicant entity or any officers, directors,
managing partners, managing members, Key Employee(s) of the proposed
SBLC, which includes senior managers, members of loan committees, and
individuals who have a meaningful participation in the direction of the
operations, policies, or financial decisions of the proposed SBLC), or
other individuals or entities that propose to hold an equity interest
of at least ten percent of the economic interest in any class of stock
or ownership interest in the proposed SBLC is subject to any legal
proceedings, enforcement action, order or agreement with a regulator or
the presence of other related concerns;
Other performance data associated with the proposed SBLC,
its parent company, or its senior management team, along with other
relevant information;
Ability to address gaps in small business lending,
especially those not served by the existing 7(a) Lender population,
including: small-dollar lending, loans to underserved populations, and
loans to support small businesses' efforts to reduce climate change
and/or to help small businesses through climate change. Applicants may
present potential market gaps and address their plan and capability to
address them;
Affiliation with lenders or lender service providers
previously sanctioned by SBA; and
The ability to sustain significant SBA 7(a) lending
activities for at least three years.
In the review process, SBA will not consider the timing of
application submission as long as a substantially complete application
is submitted within an open application period.
Once received, the Director, Office of Financial Program Operations
(D/OFPO), in consultation with the Director, Office of Credit Risk
Management (D/OCRM), Director, Office of Financial Assistance (D/OFA),
Director, Office of Performance and System Management (D/OPSM), and the
Deputy Associate Administrator of the Office of Capital Access (DAA/
OCA) or designee, makes the final determination on the application.
SBA will provide written notification to all applicants whether
they have been approved. SBA reserves the right to perform additional
due diligence of a license awardee prior to a final decision.
VII. SBLC Timeline
The SBLC application period is open as of Monday, September 2,
2024, and SBA will continue accepting applications through 11:59 p.m.
Eastern time on Tuesday, October 15, 2024. SBA will close the
application period, review and process all applications in accordance
with the instructions provided above, and award up to three SBLC
licenses. SBA anticipates issuing new SBLC licenses in late 2024. SBA
may issue licenses at a future date to applicants participating in this
open period.
VIII. CA SBLC Application
The entity applying for a new CA SBLC license must submit an
executed electronic scanned copy (in pdf format) to [email protected]
addressing each of the elements set forth below (``CA SBLC
Application''). The CA SBLC Application must be complete and organized
in tabular format. The application must include:
1. The Legal name, address, telephone, and email address of the
proposed CA SBLC.
2. The following information:
a. A copy of the applicant's IRS Tax Exempt certification and
evidence of continued non-profit status (in compliance with IRS Form
990 requirements, if applicable).
b. A copy of a Certificate of Good Standing from the Secretary of
State from the State where the lender is organized.
c. An opinion of independent counsel that the lender is (1) duly
formed, organized and validly existing and in good standing under the
laws of the state of organization, (2) chartered or registered to
conduct business in the lender's proposed operating area, and (3) in
compliance with applicable local, State and Federal laws in connection
with the formation and organization of the lender. ``Independent
Counsel'' is counsel that is not an ``Associate of the lender'' as
defined in 13 CFR 120.10.
d. A list of officers and directors. For each individual listed,
include a resume and SBA Form 1081, Statement of Personal History,
signed and dated within 90 days of submission to SBA. Pursuant to
Procedural Notice 5000-856893 any officer or director who answers
``yes'' to question numbers 10a, 10b, 10c, 11a, or 11b on the form must
also submit an explanation and fingerprint cards.
e. A list of key personnel (current and proposed) who will be
involved in loan packaging, processing and underwriting, closing,
disbursing, servicing and liquidating the lender's 7(a) loans. For each
key individual listed, include a resume and SBA Form 1081 signed and
dated within 90 days of submission to SBA. Pursuant to Procedural
Notice 5000-856893 any key employee who answers ``yes'' to question
numbers 10a, 10b, 10c, 11a, or 11b on the form must also submit an
explanation and fingerprint card. If any of these services are
contracted out, that should be noted in the applicant's business plan
explaining what those services are and how the CASBLC Applicant
exercises control over the services provided. A copy of the contract
should also accompany the application.
f. A certified copy of a Resolution of the Board of Directors
authorizing submission of the application.
g. A copy of the most recent certification from the U.S. Treasury
Department or CDFI Fund (if applicable).
h. A business plan addressing the applicant's small business
lending activities and proposed operations. The plan should include, at
a minimum:
i. An organizational chart with narrative description of
organizational units. The organizational chart must also present and
describe affiliated entities and the relationship between them.
ii. A narrative description of proposed operations including the
internal organizational units involved in sourcing, evaluating and
underwriting, closing, disbursing, servicing and liquidating SBA 7(a)
loans.
iii. Volume projections for planned CASBLC lending activity for the
first three years of participation.
iv. Projected balance sheet, income statement and statements of
cash flows for two years, along with the related interest rate,
default, and prepayment assumptions. The plan projections should be
assembled under three different operating scenarios--normalized
activity, activity assuming a 30 percent reduction in projected
lending, and activity assuming a 50 percent reduction in projected
lending. If applicable, the projections should also address the planned
level and type of secondary market activity.
v. Description of available M&TA or the procedure for referrals to
outside assistance; a plan for identifying appropriate assistance for
each borrower; a description of how the Lender will track the type of
M&TA recommended for each borrower at the time the loan was made; and
identification of M&TA services actually provided.
[[Page 65178]]
vi. Description of lending activities, particularly in the area of
small business lending, including data on the applicant's existing
small business loan portfolio, such as number of loans made,
distribution of size and age of loans made, use of proceeds, type of
loans made (secured or unsecured, revolving, term, etc.). Small
business lending may have been done by a related organizational entity
such as its parent or an affiliate. The Applicant must demonstrate that
it has at least 20 similarly sized commercial or business loans (either
guaranteed or non-guaranteed) in its portfolio. (If the lender plans to
continue to work with the related organizational entity if approved as
a CA Lender, an LSP agreement may be required. See SOP 50 10 for
further guidance on LSP agreements.)
vii. Description and data on the applicant's client demographics
and current and/or planned service area including the CA underserved
markets in that area, the small business community and its financing
needs, and the relevant economic, unemployment and poverty
characteristics for the area.
i. Copies of the applicant's year-end audited financial statements
for the last two years. If the applicant has no prior audited financial
statements, it may submit consolidated financial statements that have
been certified as ``true and correct'' by Lender's senior financial
officer for consideration. (CASBLC licensees are required to comply
with 13 CFR 120.463, SBA's regulatory accounting requirements for SBA
Supervised Lenders)
j. Interim financial statements dated within 90 days of the
application, covering the period from the last audited statement to the
end of the most recent quarter.
k. A schedule of funding sources and funds received and available
for the two year period covered by the audited financial statements.
l. Current delinquency, default and loss rates for the applicant's
entire small business loan portfolio for the prior two fiscal years in
consolidated format. Loan performance data is also acceptable for
consideration from the applicant's parent or its affiliates to
substantiate a sufficient history of similar small business lending
experience in the organization.
m. A description of existing loan loss reserve methodology,
including any risk assessments or classifications. This should include
a schedule of loan loss reserve components with calculations for the
previous eight quarters, and a description of the loan loss reserve
allocations for all loan programs in which the applicant currently
participates.
n. A copy of lending policies and procedures governing business
loan origination, closing, servicing and liquidation.
o. Any other information the lender considers relevant for SBA to
consider in evaluating the application. To the degree an applicant has
provided equivalent information on or as part of an application or for
continued participation in the CDC, Microloan, ILP or CDFI programs,
that information may be substituted provided it meets the intent of the
requirement. SBA may follow up if additional information is needed.
3. Certifications
a. The applicant must certify that it has provided filed articles
of incorporation and by-laws to either the SBA or the CDFI Fund in
connection with its participation in the 504, Microloan, ILP, and/or
CDFI programs, and that those organizing documents have not materially
changed. If material changes have occurred, a copy of the current
articles of incorporation and/or by-laws must be included with the
application.
b. The applicant must either certify that it is not subject to
regulation by a state regulator or, if the applicant is subject to
state regulation, it must demonstrate that it is in good standing with
its state regulator. The lender's written request to participate must
include a written statement that to the best of its knowledge, the
lender has satisfactory: (i) financial condition (e.g., capital and
liquidity); (ii) small business credit administration policies,
procedures, and practices that it continues to adhere to in its
operations; and (iii) small business servicing policies, procedures,
and practices that it continues to adhere to in its operations. When
reviewing good standing, SBA will look to see that a lender does not
have significant deficiencies or weaknesses in these areas.
``Significance'' may be evidenced by the number or seriousness of the
deficiencies, as determined by SBA in its discretion. SBA will verify
any good standing statement where possible with public (e.g., Cease and
Desist Orders and Call Reports) and/or non-public information from the
lender's primary and/or other regulators. Additionally, the following
information must be included:
A copy of the State statute and/or regulations governing
the applicant's operations;
A copy of the latest examination report of the applicant
by the State financial regulator, as authorized; and
A description of the State prescribed capital requirements
and a certification that the applicant meets these established
requirements.
IX. CA SBLC Evaluation Process
SBA reserves the right to deny any entity applying for a CA SBLC
license, in its sole discretion. In addition to SBA's evaluation of the
elements required in the CA SBLC Application, SBA may consider
additional factors in its evaluation. These factors include:
The lending policies of the proposed CA SBLC and their
alignment with SBA's mission;
Historical performance measures (such as default, purchase
and loss rate);
Whether the applicant is subject to any legal proceedings,
enforcement action, order or agreement with a regulator or the presence
of other related concerns;
Other performance data associated with the acquiring
concern or its senior management team, along with other relevant
information;
Affiliation with lenders or lender service providers
previously sanctioned by SBA; and
Ability to address gaps in small business lending,
especially those not served by the existing 7(a) Lender population,
including small-dollar lending, loans to underserved populations, and
loans to support small businesses through climate change. Applicants
may present potential market gaps and address their plan and capability
to address them.
In the review process SBA will not consider the timing of the
application submission, so long as the application is submitted within
the application period. The Director, Office of Credit Risk Management
(D/OCRM) makes the final determination on the application.
SBA will provide written notification to all applicants whether
they have been approved. Approval of a CA SBLC license awardee will be
conditioned on completion of training on CA SBLC Loan Program
Requirements.
X. CA SBLC Timeline
The CA SBLC application period is open as of Monday, September 2,
2024, and SBA will continue accepting applications through 11:59 p.m.
Eastern time on Friday, December 20, 2024. During the application
period, SBA will review applications on a rolling basis and approve
based on each applicant's merit and readiness to become a CA-SBLC. SBA
has discretion to eliminate any application that is incomplete or
[[Page 65179]]
inconsistent with the application instructions.
Isabella Casillas Guzman,
Administrator.
[FR Doc. 2024-17644 Filed 8-8-24; 8:45 am]
BILLING CODE 8026-09-P