H.R.2987 - Capping Excessive Awarding of SBLC Entrants Act of 2025; CEASE Act of 2025 (119th Congress)
Summary
H.R.2987, the "Capping Excessive Awarding of SBLC Entrants Act of 2025" or "CEASE Act of 2025," aims to amend the Small Business Act by limiting the number of small business lending companies (SBLCs) authorized to make loans under section 7 of the Act. The bill proposes that no more than 16 non-profit SBLCs be authorized at any given time. The bill was passed by the House of Representatives on June 5, 2025, and received in the Senate on June 9, 2025, where it was referred to the Committee on Small Business and Entrepreneurship.
Expected Effects
The primary effect of this bill, if enacted, would be to cap the number of non-profit SBLCs. This could potentially lead to increased competition among existing SBLCs. It could also limit the availability of loans for small businesses if the capped number of lenders is insufficient to meet demand.
Potential Benefits
- Potentially increased competition among existing SBLCs, leading to better loan terms for small businesses.
- May streamline oversight and regulation of SBLCs due to a smaller number of entities.
- Could prevent excessive risk-taking by limiting the number of lenders.
- May encourage more efficient allocation of resources within the SBA.
- Could lead to more focused support and training for the existing SBLCs.
Potential Disadvantages
- Potential reduction in access to capital for small businesses, especially in underserved areas, if the capped number of lenders is insufficient.
- May stifle innovation and new approaches to small business lending by limiting new entrants.
- Could create barriers to entry for new lending companies, reducing competition in the long run.
- May lead to a concentration of lending power among a smaller group of institutions.
- Potential for political influence in the selection and retention of the authorized SBLCs.
Constitutional Alignment
The bill appears to align with the constitutional power of Congress to regulate commerce (Article I, Section 8). The Small Business Act, which this bill amends, is based on this power. The limitation on the number of SBLCs does not appear to infringe on any specific constitutional rights or protections.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).