Witnesses praise SBA 7(a), 504, Community Advantage and microloan programs as on-ramps to bank lending, urge faster SBA response

WASHINGTON — Witnesses at a House Small Business Committee hearing described how Small Business Administration programs — including 7(a), 504, Community Advantage and microloans — have helped entrepreneurs start, scale and become bankable, while urging the agency to speed responses and strengthen regional outreach.

“The Community Advantage program is just as important to us,” Heidi DeArmond, president of MoFi, a rural certified community development financial institution, told the committee. DeArmond described a Missoula, Montana, clothing shop she helped finance: its owner was denied by a bank, qualified for a MoFi SBA microloan, successfully grew, and later refinanced with a bank. “She was able to buy the building and today she’s still there,” DeArmond said.

Witnesses offered examples and national figures. Chairman Williams and several witnesses noted the SBA guaranteed roughly $31.1 billion in 7(a) volume and about $6.7 billion in 504 volume in fiscal year 2024. Justin Hooper of First Financial Bank and Mike Sims of Georgia’s Own Credit Union described their institutions’ participation: Hooper cited PPP and other SBA activity at his bank and Sims said Georgia’s Own was the top credit-union producer of 7(a) loans in Georgia in 2024.

Franchise owner Frank Weddigrove told the committee the SBA’s 7(a) loan program “was the access to capital that gave me the opportunity” to buy and grow Camp Bow Wow locations in Texas. Weddigrove urged lawmakers to preserve a favorable joint-employer standard for franchisees; he noted Congress used the Congressional Review Act in early 2024 to overturn a prior National Labor Relations Board rule and said a federal judge later struck down the NLRB’s 2023 rule, restoring the 2020 standard.

Witnesses also described operational hurdles. Hooper said preferred-lender status and internal SBA experience help, but “the typical turnaround time on SBA loans within our department ranges from 45 to 75 days.” Sims and others said frequent changes to the SBA standard operating procedures (SOP) and slow responses from regional offices create processing delays that discourage some lenders and borrowers. Sims urged fuller use of regional SBA offices to help lenders navigate SOP changes and speed decisions.

CDFIs and microlenders described their role reaching borrowers that are “creditworthy but denied at banks,” DeArmond said, and noted low historical loss rates for Community Advantage and microloan portfolios. MoFi reported lending $40 million in 2024 and said its long-term loss rate is low; DeArmond told the committee many of her clients “graduate back into bankability” after completing a microloan or Community Advantage loan.

Members from both parties said SBA programs are critical and debated the broader policy environment, including tax provisions and regulatory moves that affect small-business cash flow and lender incentives. Several members asked witnesses to provide written follow-up to help inform legislation or administrative action.

No formal actions or votes were taken at the hearing. The committee requested additional materials and written responses from witnesses.