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WASHINGTON-The U.S. Small Business Administration has issued a policy notice to its 7(a) lenders stating that, until further notice, the program will not approve any more 7(a) loan requests. “SBA has encountered unprecedented demand for the 7(a) loan program. Due to this spike in demand, SBA is forced to take necessary steps to manage the program to the resources available,” a notice from SBA Administrator Hector Barreto explained. Original loan applications that have not been processed will be returned to the lenders and fax applications will be canceled but not returned. Referring to Congress’ failure to pass the omnibus spending bill last session, the notice said that SBA is working with the lawmaking body to resume the program shortly. This notice came on the heels of an earlier one reducing the maximum guarantee amount from $1 million to $750,000 starting Jan. 8. The temporary shut down of the program was announced to lenders Jan. 6. Telesis Community Credit Union CEO Grace Mayo runs one of the credit unions that received the notice. “I think they have budget issues they’re contending with.I know SBA would love to continue to support us,” she commented. Mayo added that her credit union, which takes advantage of a number of SBA loan programs, has just five loan applications that may be affected by the decision, but for credit unions that only use 7(a), it could be a lot more. “They (SBA officials) believe the shortfall will be addressed very soon, and that the future of the program overall is not at risk, according to Kevin McCall, one of the senior staff at SBA,” CUNA Associate General Counsel Mary Dunn said. NAFCU Communications Manager John Zimmerman recognized Congress’ role in the situation and stated, “If SBA has run out of funds to disburse, we look forward to Congress passing the appropriations bill and money coming back into the pipeline.” According to a Dec. 30 article in The Arizona Republic, as of Dec. 22, SBA loans were 40% higher for the first quarter of the year at 17,200 and the dollar amount was 45% higher at $2.83 billion. The new cap may not affect credit unions as much as other lenders since the average credit union member business loan is just over $100,000. [email protected]

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