SBA: New lending program open to small businesses – LVB

U.S. Small Business Administration Launches New 7(a) Working Capital Pilot Program

U.S. Small Business Administration lenders can now accept applications for the new 7(a) Working Capital Pilot Program.

Sustainable Development Goals (SDGs)

1. Goal 8: Decent Work and Economic Growth
2. Goal 9: Industry, Innovation, and Infrastructure
3. Goal 10: Reduced Inequalities

SBA Administrator Isabel Casillas Guzman said Thursday the SBA established the Working Capital Pilot Program to create a more flexible loan product to meet the market needs of the nation’s growth-oriented small businesses and give more options to SBA’s network of lenders when structuring a line of credit.

SDGs

• Goal 1: No Poverty
• Goal 2: Zero Hunger
• Goal 3: Good Health and Well-being

“Small businesses need affordable working capital to pursue revenue growth opportunities made available thanks to President Biden’s Investing in America agenda,” Guzman said in a release. “The SBA has expanded access to capital and increased small dollar lending over the past three and a half years – now, we are strengthening loan offerings through this new 7(a) Working Capital Pilot program to provide growth-oriented small businesses with competitively-priced lines of credit to fund orders and projects as they scale.”

SDGs

1. Goal 4: Quality Education
2. Goal 5: Gender Equality
3. Goal 6: Clean Water and Sanitation

 Using an innovative fee structure, the WCP provides flexible support for small businesses’ domestic and international capital needs and includes: the Transaction-Based WCP, which will allow small businesses to fund individual projects or orders, enabling access to working capital earlier in the sales cycle; and Asset-Based WCP loans, which will provide small businesses with a cost-effective way to access working capital against their assets, allowing small businesses to better manage their cash flow while also supporting supply chain resiliency, Guzman said. 

SDGs

• Goal 7: Affordable and Clean Energy
• Goal 11: Sustainable Cities and Communities
• Goal 12: Responsible Consumption and Production

FOR SMALL BUSINESSES

The SBA remains committed to maintaining a range of updated product offerings for small businesses to access working capital under the 7(a) Loan Program, including SBA Express loans, CAPLines, Export Loans and this new WCP, Guzman said. 

SDGs

1. Goal 13: Climate Action
2. Goal 14: Life Below Water
3. Goal 15: Life on Land

For small businesses participating in the global marketplace, the WCP is designed to support both domestic and international sales under one facility. SBA said for small businesses participating in the Home Energy Rebate Programs funded by the Inflation Reduction Act, the WCP provides a new solution to help companies increase capacity to serve more homeowners with their energy conversions.

SDGs

• Goal 16: Peace, Justice, and Strong Institutions
• Goal 17: Partnerships for the Goals

FOR SBA LENDERS

Lenders currently approved to process 7(a) loans can begin processing 7(a) WCP loans. Due to the specialized nature of this type of lending, the SBA has created a new type of delegated authority for WCP called Preferred Lender Program (PLP)-WCP, SBA said. 

SDGs

1. Goal 8: Decent Work and Economic Growth
2. Goal 9: Industry, Innovation, and Infrastructure
3. Goal 10: Reduced Inequalities

Lenders with delegated Export Working Capital Program (EWCP) authority will be immediately provided with delegated authority to make 7(a) WCP loans. Lenders who do not maintain delegated EWCP authority may apply for delegated 7(a) WCP status with the requirements outlined in the Program Guide, which is available for download on SBA’s Training on Demand page.

SDGs

• Goal 11: Sustainable Cities and Communities
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 10: Reduced Inequalities

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity, and innovation.
• SDG 9.3: Increase the access of small-scale industrial and other enterprises to financial services, including affordable credit.
• SDG 10.2: By 2030, empower and promote the social, economic, and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion, or economic or other status.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Number of small businesses accessing affordable working capital through the 7(a) Working Capital Pilot Program.
• Number of small businesses funded for individual projects or orders through the Transaction-Based WCP.
• Number of small businesses accessing working capital against their assets through the Asset-Based WCP loans.
• Number of small businesses participating in the global marketplace and increasing capacity to serve more homeowners through the WCP.
• Number of lenders processing 7(a) WCP loans and obtaining delegated authority for WCP.

SDGs, Targets, and Indicators

Source: lvb.com