Becoming an SBA lender in a post-PPP world

On May 31st the Paycheck Protection Program (PPP) came to a close. Created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the PPP loan program culminated in over 11.8 million loans approved by 5,467 lenders, and a total of more than $799.8 billion dollars approved for small businesses across the country.

For many credit unions, PPP lending was their first foray into providing Small Business Administration (SBA) loans to members. The CARES Act provided temporary authority for all insured credit unions to become PPP lenders; however, the authority to make a PPP loan terminates according to the Lender Agreement signed by the credit union. As credit unions look ahead to providing additional support and meeting the needs of their small business members, many may want to continue providing SBA loans.

What are the benefits of becoming an SBA lender?

First and foremost, the SBA guarantees a portion of the loans credit union lenders provide in the event of a member’s default. Credit unions may offer different SBA loan options, each catered toward assisting small businesses find capital that they might not otherwise be eligible for through existing lending channels.


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