Sens. Scott, Kennedy Introduce Bill to Stop Biden Admin’s Big Government Lending Scheme

WASHINGTON — Today, U.S. Senators Tim Scott (R-S.C.) and John Kennedy (R-La.), along with 11 of their Republican colleagues, introduced the Protecting Access to Credit for Small Businesses Act to prohibit the Biden administration from enacting their plan to make the Small Business Administration (SBA) a direct lender, which would force community banks and credit unions – who already provide loans – into competition with the government.

“When acting as a direct lender, the SBA has a consistent history of failure and inefficiency when compared to the private sector,” said Senator Scott. “The administration’s proposal is just a vehicle for a big government overreach into nearly all aspects of American life and private institutions. There’s simply no reason to use the federal government to funnel tax dollars that will later be loaned back to small businesses.”

“Fraud and inefficiency characterize the Small Business Administration’s history in direct lending. The government shouldn’t crowd out private lenders that are already doing a good job getting funds to the small businesses that need them,” said Senator Kennedy. “I’m proud to partner with Sen. Scott to stop the SBA from replacing private lenders and those in our communities with Washington bureaucrats.”

The bill is cosponsored by Senators Jim Risch (R-Idaho), Kevin Cramer (R-N.D.), Chuck Grassley (R-Iowa), Steve Daines (R-Mont.), James Lankford (R-Okla.), Joni Ernst (R-Iowa), John Cornyn (R-Texas), Ted Budd (R-N.C.), Tom Cotton (R-Ark.), Mike Crapo (R-Idaho), Rick Scott (R-Fla.), and Mike Braun (R-Ind.).


President Biden’s Fiscal Year 2025 budget includes a proposal to allow the SBA to directly make loans under the 7(a) lending program. However, the SBA has a history of performing poorly in lending programs compared to the private sector. The SBA Office of the Inspector General estimated in 2023 that the federal government Economic Injury Disaster Loan program, which was a direct-lending program, had $136 billion in potential fraud – that is 33% of total funds disbursed by the program. 

Senators Scott has consistently pushed back on the Biden administration’s attempted federal overreach into the direct lending space, including:

  • First introducing the Protecting Access to Credit for Small Businesses Act during the 117th Congress with Senator Kennedy; and
  • Sending a letter to Senate Majority Leader Chuck Schumer, then-Speaker Nancy Pelosi, and then-House and Senate Small Business Committee Chairs Ben Cardin and Nydia Velázquez warning against their plan to make the SBA a direct lender through the Democrats’ reckless tax and spending bill. 

The legislation is supported by American Bankers Association, Consumer Bankers Association, Independent Community Bankers of America, Bank Policy Institute, America’s Credit Unions, and South Carolina Bankers Association.