Yup, I said we would start back on Declaration signers today. Going to need to postpone that to next Tuesday’s opener. If I do not discuss the following I will probably forget and it is sneakily more important to the big picture of what our VSGPOTUS is doing than many realize. It is the industry in which I made my living as readers of BIMD will remember.
Small Business Acts of Importance
These links are short summaries – will not take long to read.
The official CEASE bill,
https://www.congress.gov/index.php/bill/119th-congress/house-bill/2987/text
Next is an industry summary of what it is about. ABA stands for the banking industry in this instance, not the Bar Assn. for the legal industry.
Link below is to all of the bills that came out of the great work of the HR Small Business Committee, including CEASE.
https://smallbusiness.house.gov/news/documentsingle.aspx?DocumentID=407198
Why Is All This Important?
Let’s answer that question with a simple statement that has been true for many, many years. Approximately half of the employed people in America work for who the federal government classifies as small businesses.
Must be kind of a big deal, right?
I am focusing on CEASE because of industry knowledge and experience. However, all seven Acts are very important and part of the much larger puzzle of what PDT is piecing together. Notice that all seven passed out of Committee along party lines at 15-11.
America should really stop pretending that bipartisanship can exist consistently. That idea is trash. It was promoted by the Uniparty for decades as a means for selling their dedication to American citizens, which we now know was hogwash. If you hear the word being sold by a politician or media propagandist you know what side they are on. Full stop.
Concerning all of the Acts passed in the committee, please notice that they are not all about small business necessarily. The SBA as an agency is a means to an end with some of the acts. It is also about using the agency as a weapon against illegal voter registration, against sanctuary cities, to cut regulatory burdens, and against climate change related scams.
Some on here will remember my recent posts about a fellow co-worker from my tree that took over a small business lending department for a bank in our area after I retired. He recently called and was distraught; considering early retirement over what Brandon and cronies did to the industry. They had opened the floodgates for borrower loan requests over $1 million and did not care if they were citizens or not or even if they were creditworthy. As a result fraud was rampant, delinquencies and defaults were soaring, and the agency was not honoring their guaranties on defaulted loans of even the honest lenders on a timely basis. In fact, they were trying to renege as often as they could. It had all turned into one giant clusterf–k.
i told him to be patient as I felt it would be addressed soon by the Trump admin and MAGA elected officials. Many of them experienced great heartburn over PPP program fraud that was administered by SBA during COVID. We see the results of their and the banking industry’s concerns in the bills linked above. We also see greatly improved internal policy decisions that reflect the changes below. Effective June 1, that hammer fell. All SBA lenders and small business borrowers must comply with the following revised, common sense, sound credit parameters and requirements to obtain SBA guaranteed loans.
https://www.commerciallendingx.com/blog/sba-policy-changes-effective-june-1st-2025
Most were parameters that were already required in some format and/or amount during my career that effectively ended on a full time basis 17 years ago. That they were not followed in the years since simply points to the systematic destruction of critically important financing options for small business owners who do not ordinarily qualify for conventional financing options at banks and other lenders. Brandon’s bunch desired the opposite to increase funds for the woke and money launderers.
The primary purpose of this private/public partnership between banks and the federal government is to provide capital to small businesses that need and deserve support. In turn they grow, provide products and services to the public, pay taxes, provide incomes and benefits to owners and employees, play important parts in communities and so on. In summary, they participate in the American Way. Many successfully become larger businesses and iconic brands that employ even larger numbers of people. However, it is true that many big businesses do not want increased competition. As a result they play politics with their smaller competitors to retain market share.
Which leads to the Main Street versus Wall Street tension that SD at TCTH discusses as well as in discussion within our federal government today. The former party of big business only is now the party of Main Street as well with the America First policies of the MAGA movement, thanks to the efforts of the patriots in league with PDT. The internal tension within the GOP will be to keep the playing field level for both big and small business. Which makes the next topics encouraging for us Main Street types.
CEASE Act
Some may ask why would an act be necessary to limit the number of non-bank lenders who could be active in SBA lending programs? Here is what led to it,
The truth is some of the non-bank small business lenders with licenses, SBLC’s, typically are bottom feeders. Some only meet minimum capitalization requirements and receive funding from other wholesale lenders at a higher cost of funds than banks typically realize. They also are not subject to regulatory scrutiny of the banking industry. That can lead to some shady dealings at times.
As a result some SBLC’s typically take more risk and charge borrowers higher interest rates to counter. As a natural consequence they experience higher delinquency rates and loan defaults. Like many other bank lenders in the program, they sell participations in the SBA guaranteed portions of loans to investors such as hedge funds, pension funds, insurance companies, credit unions, etc, that are usually represented by investment brokerage houses. The lack of credit worthiness of some of their customers impacts the overall performance of the pools of loans that go into securitizations that are sold to the end investors. This reduces their value over time, which reduces the premium offered to all lenders in the programs. It is not fair to thousands of banks that a handful of SBLC’s acting in bad faith are allowed to spoil the debt market barrel for the product. Not to mention the extra work created for SBA’s liquidation area on defaulted loans.
This is a weakness for all types of debt markets on Wall Street. it was the underlying cause of the debt market collapse of 2008 leading into The Great Recession. So what is the primary that weakness that can cause a nation’s economy to crumble? The Wall Street buyers of all types of loans are not “credit” people as bankers view credit. For example, bankers view credit from the perspective of the 5 C’s of credit, which bank regulators like from the FDIC understand and consider in their reviews. Those categories are character, capacity, capital, collateral and conditions. Commercial bankers are trained in the long established methodology of making loans to borrowers who are most likely to repay the bank back on time. This is the Main Street view – know your borrower and how they handle their business.
Wall Street sees credit differently. They do not drill down into individual loans to determine viability. They view historical performance of industries (SIC codes) and locational aspects along with loan pool average interest rates, terms, collateral, industry concentrations, etc. as the credit of the overall deal. They rely on rating agencies – S&P, Moody’s and Fitch to ascertain their overall rating of each pool of loans. The ratings agencies typically only review a small sampling of loans and are more interested in the documentation being correctly executed. To Wall Street, those are the factors that provide the credit worthiness of the macro pool of loans, not the micro individual loans themselves.
In my opinion this void in understanding credit was a major cause of the Great Recession because it happened in every type of debt instrument – residential mortgages, car loans, credit cards, commercial real estate, etc. This led to the banker version of credit being undercut by the crappy underwriting of non-bank lenders in all of those business segments, industries, and locations. Wall Street purchased huge volumes of loans from those sources in many overheated markets. When the borrowers began tanking on their loans in large numbers as the economy and job markets cooled, caused by politicians primarily, the funding for new loans in even stable industries also dried up. The institutional buyers were deservedly spooked and sought safe harbor in treasuries and other more stable investments. All of the insurance coverage with hedges, swaps and such went down with it. The Great Recession kicked in.
As it applies to SBA lending, when lesser performing SBLC’s provide lower quality loans to a mixed pool involving other lenders, they can taint the whole pool and hide crap loans. SBLC loans are mixed into pools with those of banks. Everybody is affected. As you will see below, they rack up some profits short term and once the crap begins to hit the fan – poof – they are gone.
Current Status
Below is the list of active SBLC’s as of 1/29/25 with authorization to make loans up to $5 million.
Alaska Growth Capital BIDCO, Inc. Nationwide
Arkansas Capital Corp. Nationwide
Centerstone SBA Lending, Inc. Nationwide
CRF Small Business Loan Company, LLC Nationwide
First Western SBLC, Inc Nationwide
Grow America Fund, Inc. Nationwide
Harvest Small Business Finance, LLC Nationwide
Lendistry SBLC, LLC Nationwide
Lendstream Small Business Finance, LLC Nationwide
Port 51 Lending, LLC Nationwide
Readycap Lending, LLC Nationwide
VelocitySBA, LLC Nationwide
Notice anything about the current list? There are 16 licenses authorized by the past act before Brandon and gang removed that restriction, at which time it went up to 19 approved lenders when they approved three new lender licenses. I will address an even worse atrocity associated with the 2023 changes involving the creation of special purpose lending companies later in this text below.
Currently, it is back to 16 authorized SBLC licenses again, yet, there are only 12 licensed lenders as of the beginning of PDT’s term of office. What happened to the four that were approved in the second half of 2024 – Cooperative Business Services (CBS), A10 Capital, Lafayette Square and Stonehenge Capital as replacements for four others who dropped out previously? They are not on the current list.
This is because their applications did not get activated with required Congressional approvals in time before PDT assumed office, so they lost out with PDT coming in. We also know one of the current licensees, Lendstream, has not made any SBA loans since 2022. They should not even have the license if they are going to be inactive, so something is “off” there. We also know that one of Brandon’s newbie three, Funding Circle, closed its operations soon after it started. Two were added that are still on the list, Alaska and Arkansas. So, sometime in 2024 they also replaced two that dropped off the list. That means a total of 6 lenders were approved to replace 6 on the list in 2024 and three were added above the former 16 limit, one of which failed. That is a movement of 9 non-bank licensed lenders in a year. That leaves 11 that are actually making SBA loans out of 16 authorized slots in 2025.
Needless to say making fraudulent loans to formerly ineligible customers (i. e. illegals) by criminal enterprises using federal guaranties on the majority of the loans that create extra profits for the subject non-bank lenders is a recipe for disaster for the programs, SBA and Americans. The current admin is taking the approach of eliminating that possibility in opposition to Brandon and the Uniparty who had that as their MO for SBLC’s since banks are more controlled by Congressional acts as well as regulatory authorities.
Hypothetically, let’s say you are a higher up in a cartel and you have established some seemingly legit businesses to launder cash through. In the past you could invest into an SBLC with the Brandon regime’s approval through a shell company or other legit business. You would then have the ability to influence or otherwise approve loans to other connected businesses to pull cash and/or launder money. In those businesses there would probably be hordes of illegals as employees who were given some form of legal resident status by Brandon’s crims, which undoubtedly also led to some being illegally registered as voters, Medicaid recipients, Social Security recipients and so on. All of the above would support Dem politicians and designees.
Is some of this making sense now? SBA is just one agency of the federal government that was used for these type purposes, there were many more.
In my personal opinion, that cartel/crim scenario probably applied to more than one of the exited licensed lenders including the ones discussed in the link below. The legit SBLC’s generally make enough good loans to help cover for the excessive bad loans of the crims, who have lower loan volumes as they attempt to stay under the radar. The loan volume of the better lenders is higher and they have received SBA’s highly desired Preferred Lender status rating, which means they do things right. I know several of the leaders of these quality lenders; did business with one CEO when he was employed at a well known SBLC from BIMD.
The following SBA press release from a month ago gives clarity and examples of an explosion of the new special purpose SBLC’s that Brandon’s crims put in place.
https://www.sba.gov/article/2025/05/19/sba-overhauls-reckless-biden-era-lending-program
From the link; “However, in 2023, the Biden Administration revived Community Advantage and approved more than 140 new, unregulated lenders for the program, selectively certifying groups including “The Progress Fund,” “PeopleFund,” and “Black Business Investment Fund.” It then attempted to increase the loan limit for the program from $250,000 to $500,000 – or up to $2 million to fund climate-related projects in support of the Green New Scam.”
SBA as an agency and the industry was a goner if PDT had not won. Obviously the agency was a major source of fraud and money laundering using leftist scams and illegals.
Conclusion
All of these current congressional activities tell me the Trump admin is all over it and knows the game the crims have been playing. The plug is being pulled and it is a GREAT thing for America in many areas of concern.
Please remember Wolf’s rules for our community. In general that means to be respectful to each other and to pull no shenanigans that your mom might find offensive or otherwise cause jail time. That said, free speech is honored here.
Be blessed and go make something good happen!
