SBA 7(a) Loan Count Fell 27%, Lendesca CEO Chris Hurn Says

The number of loans made under the U.S. Small Business Administration's 7(a) program fell more than 27% in the agency's final year-end tally, while dollar volume dropped about 12% and the average loan size rose 21%, Chris Hurn, chief executive of Lendesca, said in an interview published by deBanked on October 13.

Hurn tied the drop to tighter conditions for smaller loans, saying it is "not as easy and simple to make these small loans like it was in the recent past."

The SBA has moved to reduce default rates with more conservative underwriting on smaller loans and has sought to raise the maximum 7(a) loan from $5 million to $10 million, deBanked reported. Other factors cited included a new requirement that borrowers be 100% owned by U.S. citizens and uncertainty over tariffs.

Under a new standard operating procedure effective October 1, businesses with merchant cash advances can again reach SBA financing, but only after refinancing the advance into a term loan and making payments on it for two years. Hurn said the original ban was "a bit misguided" and that the revision creates an opening for non-SBA lenders to provide the bridging term loan.

Hurn, who previously founded Fountainhead, said Lendesca works as an originating lender service provider for bank clients and can produce a conditional approval letter in under two hours.

This story was first reported by deBanked.