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 capping the number of non-profit SBLCs at 16. This legislation was introduced in the House of Representatives and reported with an amendment.
Expected Effects
The primary effect of this bill, if enacted, would be to restrict the number of new non-profit SBLCs that can be authorized. This could lead to increased competition among existing SBLCs. It may also affect the availability of loans for small businesses, depending on the demand and the efficiency of the existing SBLCs.
Potential Benefits
- Potentially increased efficiency among existing SBLCs due to greater competition.
- Possible reduction in oversight burden for the Small Business Administration (SBA).
- May prevent the proliferation of inefficient or poorly managed SBLCs.
- Could lead to more focused support and resources for existing SBLCs.
- May streamline the lending process for small businesses by limiting the number of entities involved.
Potential Disadvantages
- Reduced access to capital for small businesses if the existing SBLCs cannot meet the demand.
- Potential for decreased innovation in lending practices due to reduced competition from new entrants.
- Possible geographic disparities in access to loans if SBLCs are concentrated in certain areas.
- May stifle the growth of new and innovative lending models.
- Could create barriers to entry for new organizations seeking to support small businesses.
Constitutional Alignment
The bill appears to align with the Commerce Clause (Article I, Section 8) of the U.S. Constitution, which grants Congress the power to regulate commerce, including activities that substantially affect interstate commerce. The Small Business Act, which this bill amends, is itself based on this constitutional authority. By regulating the number of SBLCs, Congress is exercising its power to regulate economic activity.
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).