SBA Launches Working Capital Pilot Program to Support SMBs
The Small Business Administration (SBA) is launching a new pilot program within the 7(a) Loan Program aimed at supporting small and medium-sized businesses (SMBs) by providing working capital. The Working Capital Pilot Program (WCP) will offer short-term loans of up to $5 million for both international and domestic transactions.
Under the WCP, lenders can authorize loans with terms of up to 60 months, with varying SBA guarantee percentages based on the loan amount. SBA Administrator Isabella Casillas Guzman emphasized the importance of working capital for small businesses, stating that it allows them to take on new opportunities and grow.
The SBA expects to approve around 270 WCP loans totaling approximately $337 million in 2025. The program will be effective from August 1 and will expire by the end of July 2027. This initiative comes at a time when U.S. merchants’ optimism is low, highlighting the importance of effective working capital management for business growth.
The WCP program offers a deferred payment option, giving SMBs the flexibility to stabilize their operations before starting loan repayments. This feature aims to help businesses cover essential costs like payroll, inventory, and other day-to-day expenses, as well as invest in new technologies and digital solutions.
While the SBA is focusing on SMB financing solutions, the British Business Bank has also launched a program to support access to finance for smaller UK businesses. Improving SMBs’ access to working capital solutions that meet their needs remains a challenge for banks and lenders, with only 8.5% of SMBs finding working capital loans readily available.
Despite the SBA’s efforts, competition in the SMB lending space is fierce, with private sector players like FIS launching solutions to help banks source, underwrite, and fund loans to SMBs. The SBA’s WCP program and similar initiatives aim to address the funding gap for small businesses and support their growth in a challenging economic environment.
