WASHINGTON – Sens. Chuck Grassley (R-Iowa) and Joni Ernst (R-Iowa) joined Sens. Tim Scott (R-S.C.) and John Kennedy (R-La.) to introduce the Protecting Access to Credit for Small Businesses Act. The legislation prohibits the Biden administration from making the Small Business Administration (SBA) a direct 7(a) lender, which would force community banks and credit unions to compete with the federal government. The president included this proposal in his Fiscal Year 2025 budget request.  

“The government doesn’t need to get involved where the private sector suffices. Our bill ensures small businesses and local lenders can continue their work without the government’s heavy hand in the way,” said Grassley, who works to combat fraud and has expressed concerns about executive overreach. 

"The SBA has repeatedly shown that it is incapable of running a direct loan program without millions in subsidies from the American taxpayer," said Ernst, who serves as ranking member of the Senate Committee on Small Business and Entrepreneurship. "To protect our dollars and community banks, Iowans’ traditional source of SBA loans, I'm working to prevent the agency from issuing any direct loans under the 7(a) program and recently pushed Administrator Guzman to say on the record that she would not restart any direct lending program without additional Congressional authority."

“The Iowa Bankers Association thanks Senators Grassley and Ernst for introducing the Protecting Access to Credit for Small Business Act,” said IBA President & CEO John Sorensen. “Local Iowa banks are present in nearly every Iowa community with 1,400 locations serving small business and farmers. These bank lenders have been the principal providers of SBA loan programs to qualifying borrowers. A direct SBA lending program would have to recreate this distribution system at significant cost and risk to American taxpayers.” 

“As a business owner deeply invested in the success of small enterprises, I fully support this legislation, as it is a crucial step in safeguarding the integrity and efficiency of lending for small businesses,” said R&J Material Handling owner Dave Cassens. “Let’s empower local lenders to drive economic growth, rather than relying on government bureaucracy prone to inefficiency. I feel as though this legislation ensures that entrepreneurs can continue to access vital financial resources through trusted community institutions."

In addition to support from Iowa financial institutions and small businesses, the Protecting Access to Credit for Small Businesses Act is endorsed by the following national organizations: the American Bankers Association; the Consumer Bankers Association; the Independent Community Bankers of America; the Bank Policy Institute; and America’s Credit Unions.  

Also cosponsoring the legislation are Sens. Jim Risch (R-Idaho), Kevin Cramer (R-N.D.), Steve Daines (R-Mont.), James Lankford (R-Okla.), John Cornyn (R-Texas), Ted Budd (R-N.C.), Tom Cotton (R-Ark.), Rick Scott (R-Fla.) and Mike Braun (R-Ind.). 

Download bill text HERE.  

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