In its quest to attract new green lenders, Biden-Harris Administration Opens SBA Loan Programs to New Green Lenders to Help Small Businesses Meet Climate Goals. SBA is seeking partnerships from various financial actors, ranging from highly localized micro-lending institutions to national financial establishments. These lenders are given an opportunity to apply in various categories.
These include becoming a micro-lender, providing loans of up to $50,000; becoming a Certified Development Company, a non-profit entity focused on advancing the economic development of its region; or ascending to the role of a Community Advantage Small Business Lending Company, also known as CA SBLC. A CA SBLC is a non-bank lender with an emphasis on financing “mission driven” projects.
The SBA does not directly provide the loans but collaboratively works with various lenders to offer small business loans, which typically have lower interest rates compared to conventional loans.
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The SBA is currently finalizing the application process for prospective CA SBLCs, with a plan to increase the existing loan cap of $350,000 to $500,000 for active CA SBLCs. CA SBLCs will also have the capability to apply for larger loans, with amounts up to $2 million earmarked for climate-related initiatives.
“Small businesses and homes represent more than one-third of U.S. emissions, emphasizing the critical role they play in the overall solution” noted SBA Administrator Isabel Guzman. Through this initiative, SBA aims at empowering more climate-focused lenders to leverage the SBA federal loan guarantee programs in support of the ongoing transition to clean energy.
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