SBA Reverses Biden-Era Loan Policies, Citing $397M Deficit and Surge in Defaults

The U.S. Small Business Administration has announced a sweeping rollback of Biden-era policies that the SBA says had significantly loosened underwriting standards for the agency’s flagship 7(a) loan program—a move SBA officials say endangered both the program’s long-term viability and taxpayer dollars. Under the direction of newly appointed SBA Administrator Kelly Loeffler, the agency says it will restore robust lending criteria and reimpose lender fees to curb what it describes as a rising tide of borrower defaults. “The last Administration inherited a thriving 7(a) loan program but left it in critical condition—dismantling every common-sense guardrail that kept it solvent and self-sustaining,” Loeffler said in a statement. “From slashing lender fees to destroying underwriting standards, Biden’s reckless policies have triggered a surge in defaults which now threatens the viability of the program along with its risk to taxpayers.” The SBA’s 7(a) loan program provides government-backe...