This bill would prohibit the Small Business Administration from directly issuing loans under its 7(a) loan program, which is a major source of funding for small businesses. Instead of the SBA making these loans directly to businesses, lending would be handled exclusively through partner banks and lenders. The legislation would allow the SBA to continue servicing loans it made before this law takes effect, but would prevent it from originating any new direct loans going forward. The bill does not specify new funding amounts or detailed implementation timelines. Supporters of this approach argue it would streamline lending processes by relying on private financial institutions, while critics contend it could reduce credit access for small businesses that may have difficulty borrowing from traditional banks.
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