Final Microloan Rules In Line with AEO Comments
Last week the SBA published final rules on the Microloan Program finalizing four important changes. As you may recall from last year, these changes were initially proposed by SBA in May 2014. The changes are improvements AEO has requested to strengthen the program and we pleased to see them put in place. As we noted in our initial comments, which you can read here, these changes were supported in findings by AEO’s Micro Capital Task Force. AEO is pleased to see the SBA continued with the implementation of these changes, despite some opposition in comments from other organizations. AEO continues to work closely with SBA to improve the program, including in support of changes before Congress.
The rule included expanding the pool of eligible borrowers to include businesses with an associate on probation or parole, increasing minimum microloan production standards over three years to twelve loans per year, removing the requirement that Intermediaries deposit funds only in interest bearing accounts, and allowing Microloan Program Intermediaries to use credit unions as depositories for their Microloan Revolving Funds (MRFs) and Loan Loss Reserve Funds (LLRFs).
Changes will go into effect on July 15, 2015.
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