Eligibility of Small Business Investment Companies to Participate as Lenders in Guaranteed Loan Programs of Small Business Administration and Farmers Home Administration

The Administrator of the Small Business Administration (SBA) requested a legal opinion as to the eligibility of small business investment companies (SBIC) to participate as guaranteed lenders in SBA's section 7(a) Guaranteed Loan program and the Farmers Home Administration's Business and Industrial Loan program. In the absence of authorizing legislation, it is impermissible for SBICs to participate with SBA and Farmers Home Administration as guaranteed lenders.