Scoop: SBA expands its primary business loan program

The U.S. Small Business Administration has chosen three new lenders to make SBA 7(a) loans nationally, Axios has learned.

Why it matters: This marks the first time in more than 40 years that the SBA has expanded its primary business loan program and brings the total number of nonbank lenders up from 14 to 17.

Details: The SBA has chosen Arkansas Capital Corporation, Alaska Growth Capital and Funding Circle to expand their services.

• Arkansas Capital Corporation is a community development finance institution (CDFI) that, since 2019, has devoted more than half of their lending to persistent poverty counties.
• Alaska Growth Capital, an Alaska-based Business and Industrial Development Corporation (BIDCO), focuses on helping Alaska Native, Native American, and Native Hawaiian businesses and communities.
• Funding Circle is an online lending platform based in Denver focused on small businesses in rural areas and low- to moderate-income neighborhoods.

The big picture: Small businesses have been squeezed by higher interest rates this year and tighter lending conditions that began after the failure of Silicon Valley Bank and Signature Bank.

• Entrepreneurs also face unequal treatment when they seek out loans — particularly if they are from underrepresented communities.

Be smart: The SBA has been actively working to expand the number of lenders since last year.

• The current administration has also been very vocal about inclusive economic growth.

What we're watching: The lenders will not be beholden to specific quotas, but the SBA will track and publish certain metrics, sources familiar tell Axios.

Go deeper: SBA-backed loans to Latino-owned small businesses hit $3B