On April 28, the Small Business Administration (SBA) issued an updated Federal Register Notice (Notice) to provide additional information on reforms to the Community Advantage (CA) Pilot Program. The updated rules follow the Biden-Harris Administration’s recent announcement extending the pilot program through September 30, 2024, and lifting the moratorium prohibiting new CA lenders. The new guidance outlines key changes that will impact existing CA lenders as well as new CA lenders.
Some of the program changes include:
- Increasing the maximum eligible CA loan size from $250,000 to $350,000
- Removing the restrictions that can keep individuals with criminal backgrounds from accessing the CA program
- Simplifying underwriting and collateral requirements for borrowers and lenders, including increasing the maximum unsecured loan size from $25,000 to $50,000, thus removing barriers that disproportionately impact underserved borrowers
- Allowing lenders to offer lines of credit, interest-only periods, and other loan modifications to best serve their borrowers’ capital needs
- Updating packaging fee guidelines to better enable lenders participating in the CA program to scale and increase volume to underserved communities
In addition to this updated Notice, the SBA recently released an updated participant guide for CA lenders. This guide encompasses information on the program’s operations and what prospective CA lenders can expect when applying. The SBA will hold a series of training courses on the updated rules. Recordings will also be available on-demand following each session:
- Monday, May 23, 3:00-4:15 ET – for existing CA lenders
- Thursday, May 26, 1:00-2:15 ET – for non-CA lenders
OFN will continue to work with the Biden-Harris Administration to implement critical reforms to SBA programs that will help more small businesses access the capital they need.
For more information on the CA program, contact OFN’s SVP, External Affairs Dafina Williams.