HR 2987119th CongressIn Committee

CEASE Act of 2025

Introduced: Apr 24, 2025

Economy & TaxesFinancial Services

Standard Summary

Comprehensive overview in 1-2 paragraphs

The CEASE Act of 2025 amends the Small Business Act to cap the number of for-profit small business lending companies (SBLCs) that can participate in the SBA's 7(a) loan program. Specifically, it adds a new provision stating that not more than 16 SBLCs that are not nonprofit entities may be authorized to make loans under section 7 at any time. Nonprofit SBLCs are not subject to this cap. The bill seeks to limit entry and growth of for-profit SBLCs within the SBA 7(a) program, delegating enforcement to the SBA Administrator. If enacted, this could reduce the number of private lenders in the program and potentially affect access to SBA loans for small businesses, depending on how the cap interacts with current and future participants.

Key Points

1Enacts a new subsection (k) to Section 23 of the Small Business Act establishing a cap: no more than 16 for-profit SBLCs may be authorized to make loans under SBA Section 7 at any time.
2Applies specifically to small business lending companies that are not nonprofit entities; nonprofit SBLCs are exempt from the cap.
3The cap is to be enforced by the SBA Administrator, who would need to manage lender authorizations to ensure the limit is not exceeded.
4The provision targets only the for-profit SBLC segment within the SBA 7(a) loan program; traditional banks, credit unions, and nonprofit lenders are not all affected equally.
5Legislative status: Introduced in the 119th Congress, passed the House on June 5, 2025, and referred in the Senate to the Committee on Small Business and Entrepreneurship. Sponsor not identified in the provided text.

Impact Areas

Primary affected group/area: For-profit Small Business Lending Companies seeking to participate in SBA 7(a) loans; small business borrowers who rely on these lenders for SBA-backed financing.Secondary affected group/area: Nonprofit SBLCs (not subject to the cap) may retain or grow their participation, potentially shifting market share toward nonprofit providers.Additional impacts: Potential changes in competition and access to capital for small businesses, especially in markets where for-profit SBLCs are a primary source of SBA 7(a) lending; possible administrative burden on the SBA to monitor and enforce the cap; unclear implications for current SBLCs already operating under the program and how the cap would be implemented or phased in.

Generated by gpt-5-nano on Oct 3, 2025