SBA: New lending program open to small businesses

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

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. 

“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.” 

 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.  

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.  

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. 

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.  

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.