Federal loans for fintech lenders offered under Scott’s bipartisan bill

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Fintech lenders will be able to access certain federal small business loans under bipartisan legislation introduced by US Senator Tim Scott (R-SC).

The Small Business Credit Expansion Act, S. 2690, which Senator Scott sponsored on Aug. 10 with lead original co-sponsor U.S. Senator John Hickenlooper, D.C., will raise the Small Business Administration (SBA) 7 criteria (a) Small Business Loan Program that includes financial technology lenders who are part of an emerging industry that uses technology to improve financial performance.

“As a former small business owner, I know all too well the barriers to entry that prevent entrepreneurs from opening stores,” Senator Scott said. “The Small Business Credit Expansion Act is just one step we can take to ensure that minority communities and people in rural America have the same access to the American Dream as everyone else.”

If effective, Act 2690 will lift the moratorium on licenses for small business credit companies (SBLC); redirect unused funds to fight the COVID-19 pandemic from various stimulus bills to the SBA, which will oversee the new SBLC; and require the administrator to review financial soundness and eligibility when considering new applicants for the program, according to the invoice summary provided by Senator Scott’s office.

This measure received support from the Electronics Deals Association, the Innovative Lending Platform Association and the Bipartisan Policy Center.

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