WASHINGTON, D.C. – Today, Senator Rick Scott joined Senator Tim Scott and seven of their colleagues to reintroduce the Protecting Access to Credit for Small Businesses Act to reduce fraud and waste in the federal government by prohibiting a Biden-era rule that forced America’s community banks and credit unions to compete with the federal government to issue loans. This legislation will preserve the traditional public-private partnership model of the Small Business Administration (SBA) lending, which is vastly more efficient and better tailored to the needs of small businesses from coast to coast.

Senators John Barrasso, Ted Budd, Kevin Cramer, Mike Crapo, Steve Daines, Cindy Hyde-Smith, and Jim Risch are co-sponsoring this bill. 

Senator Rick Scott said, “Small businesses are the backbone of our economy. I’ve run businesses small and large, and I know the pressure these owners face having employees rely on them to make payroll so they can support their families. When they look to their federal government for support, they shouldn’t be subject to big government overreach, nor left without because of fraud and waste allowed by government inefficiencies. The Protecting Access to Credit for Small Businesses Act ensures small businesses can continue to access federal resources they need through trusted, community-based lenders that best serve their needs without more big government getting in the way.”

Senator Tim Scott said, “The SBA has a poor track record as a direct lender, especially compared to local banks that know the communities they serve. Allowing the SBA to directly offer loans is not just another example of government overreach, it would also hurt Main Street by creating unnecessary competition with community banks and credit unions. The private sector has a much stronger record of managing loans effectively, and the last thing we need is big government disrupting a system that local businesses rely on.”

Senator John Barrasso said, “Wyoming’s community banks and credit unions know our local small businesses better than unelected, unaccountable Washington bureaucrats. The Biden administration tried to push direct government lending to undermine these partnerships. The Protecting Access to Credit for Small Businesses Act prioritizes local lenders and ensures Wyoming small businesses get the credit they need.”

Senator Ted Budd said, “Time and again, the federal government has shown it is neither efficient nor effective when it comes to delivering direct loan support to small businesses. Community banks and credit unions, not Washington bureaucrats, understand the needs of the businesses they serve. It’s time we stop sidelining them. I am proud to join Senator Scott and my colleagues to put power back in the hands of local institutions that invest in our communities, rather than forcing them to compete with the federal government.”

Senator Kevin Cramer said, “The Biden proposal to allow the SBA to directly make loans under the 7(a)-lending program undercut the private sector. Protecting access to credit for small businesses is critical and we must prevent the federal government’s blatant attempt to control the direct lending space.”

Senator Mike Crapo said, “Inserting the heavy hand of the federal government into a role community banks and credit unions already serve is redundant and wasteful. We can rely on our private institutions to help small businesses access capital without putting them in direct competition with the federal government.” 

Senator Steve Daines said, “Small businesses make up 99 percent of all businesses in Montana and the community lenders who are vital to facilitating the flow of capital to our small businesses should not be forced to compete directly with the federal government. I’m glad to join my colleagues to introduce this bill, which will unleash the full potential of the private markets and remove the improper role of the federal government in decisions best made between a bank and the businesses they serve.”

Senator Cindy Hyde-Smith said, “Mississippi’s small businesses play a vital role in our state’s economy, and they thrive when local lenders, who understand their communities, are leading the way. With this bill, we want to return the SBA to its traditional role as a guarantor rather than a direct lender, which will allow our private, local financial institutions to continue meeting the needs of our local entrepreneurs.”

Senator Jim Risch said, “Access to capital remains one of the biggest challenges small businesses face. The Protecting Access to Credit for Small Businesses Act stops the federal government from getting involved in a process private lenders have handled well for years, allowing small businesses to thrive without bureaucratic roadblocks.”

Rob Nichols, president and chief executive officer, American Bankers Association said, “In partnership with banks of all sizes, the SBA’s 7(a) lending program continues to deliver critical financing to small businesses across the country. Creating a direct lending program within the SBA would duplicate and crowd out these existing private-sector efforts and threaten access to much-needed capital, and we appreciate Chairman Scott’s leadership in introducing this important bill to prevent these potential harms. We look forward to working with him to strengthen the existing 7(a) framework and ensure that private lenders can continue to perform their vital role in supporting our nation’s small businesses.”

Jim Nussle, president and chief executive officer, America's Credit Unions said, “Financial inclusion and access to capital for entrepreneurs are critical in ensuring the growth and development of vibrant small businesses. The SBA government guaranteed lending programs, like 7(a), demonstrate successful public-private partnerships that work as borrowers can obtain loans from credit unions that they know and trust. Direct lending from the SBA would invalidate this partnership, driving up program costs and disincentivizing 7(a) Loan Program authorization within financial institutions. America’s Credit Unions is proud to protect consumer relationships by supporting Senator Tim Scott’s Protecting Access to Credit for Small Businesses Act, which seeks to prohibit the SBA from directly making loans under the 7(a) program.”

Erik Rust, senior vice president and head of government affairs, Bank Policy Institute said, “BPI supports this commonsense legislation that preserves the important relationship between small businesses and their banks and prevents bureaucratic inefficiency from interfering. Small businesses across the country deserve the private sector’s expertise and customer service when it comes to accessing affordable credit in order to grow.”

Dan Schline, president and chief executive officer, Carolinas Credit Union League said, “The Carolinas Credit Union League fully supports Chairman Scott’s Protecting Access to Credit for Small Businesses Act. We greatly appreciate his leadership in ensuring small businesses can continue to access capital through mission-driven lenders like credit unions - institutions that truly understand and serve the unique needs of their communities, rather than relying on a one-size-fits-all approach.”

Lindsey Johnson, president and chief executive officer, Consumers Bankers Association said, “On behalf of America's leading Main Street banks, we commend Senator Scott for reintroducing the Protecting Access to Credit for Small Businesses Act, which rightly seeks to ensure the SBA does not engage in direct lending under the 7(a) program. Allowing the SBA to compete with private sector lenders would not only strain program resources and drive up costs, but also discourage banks from partnering with the SBA—ultimately undermining access to capital for the small businesses that need it most.” 

Rebeca Romero Rainey, president and chief executive officer, Independent Community Bankers of America said, “ICBA and the nation’s community banks thank Chairman Scott for introducing the Protecting Access to Credit for Small Businesses Act to bar the SBA from making direct loans under its 7(a) program. Given the SBA’s poor and costly track record in direct lending - including high subsidy rates and excessive instances of fraud in previous direct loan programs - ensuring the 7(a) program continues to utilize private-sector lending expertise is critical to preserving its continued success in supporting small businesses.”

Fred L. Green III, president and chief executive officer, South Carolina Bankers Association said, “The South Carolina Bankers Association greatly appreciates Sen. Scott for introducing the Protecting Access to Credit for Small Business Act. This legislation will ensure that the proper place for lending is with banks and not the government. Everyday banks efficiently, and with deep knowledge of their customers and communities, provide critical financing for small businesses. The Small Business Administration is an important partner, but banks are ultimately best equipped to take care of their communities.”

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