Get Ready. Get Set. Go! SBA Suspends 7(a) Loan Guaranty Program

A window of opportunity has opened up since many banks and lenders will put SBA loan applications into abeyance.

The Small Business Administration announced Thursday that it has suspended its main $9.4 billion loan program, stating it had run out of money.

The 7(a) Loan Guaranty program benefits business owners who typically do not qualify for traditional bank loans, said Sue Hensley, an SBA spokeswoman. Major lenders said the program’s suspension, even though temporary, is a sharp blow to small- business owners.

Some members of Congress, meanwhile, said the agency did not request enough money to meet mounting loan demand.

Congress did not approve a budget for the SBA before it adjourned last month. It passed a continuing resolution in October, giving the agency $3.3 billion until the budget is approved, but that money has evidently run out. Reportedly the administration is waiting for Congress to approve an additional $470 million that the Office of Management and Budget has allocated, Hensley said.