Lafayette Square's New License Expands Opportunities for Small Businesses

Lafayette Square's New SBLC License Announcement

Lafayette Square, a prominent business development company, has been granted a new license by the U.S. Small Business Administration (SBA) as a Small Business Lending Company (SBLC). This marks a significant step for the organization as it becomes one of only four companies licensed this year.

Impact of the SBLC License

The SBLC designation empowers Lafayette Square to expand its operations into the realm of 7(a) lending. This will enable the firm to substantially enhance its support for entrepreneurs in various working-class communities throughout the nation.

Previous Licensing Achievements

This latest license is Lafayette Square's third from the SBA, following the successful acquisition of two Small Business Investment Company (SBIC) licenses. Each of these designations showcases the firm's commitment to fostering business growth in underserved markets.

Words from the Leadership

Damien Dwin, the Founder and CEO of Lafayette Square, expressed the importance of this SBLC license: "This designation strengthens our securitization function, allowing us to reach a broader range of underserved markets while adhering to conservative underwriting standards. Our existing SBIC licenses, in combination with the SBLC designation, uniquely position us to tap into low-cost, long-term funding resources for small businesses, particularly those in need."

The Role of the SBA in Supporting Entrepreneurs

Administrator Isabel Casillas Guzman highlighted the significance of new lenders entering the market, stating, "For the second time in over 40 years, the Biden-Harris SBA welcomes new lenders that share a mission to address capital shortages in underserved areas—the same regions starting new businesses at the highest rates in America today." This alignment with the SBA's objectives facilitates access to vital capital for many aspiring entrepreneurs across the country.

Government Guarantees and SBLCs

An SBLC license allows lending organizations to use government guarantees when underwriting small business loans. This significantly reduces the risk for lenders and the borrowing costs for small business owners. With government support, SBLCs are poised to generate a higher volume of loans compared to conventional lending options.

Performance in Minority Lending

The existing SBLC licenses have shown remarkable success in lending to minority-owned businesses, outpacing traditional banks and credit unions. The increase in the number of SBLCs—from the current 16 to 20—will further expand capital access for underserved entrepreneurs and foster economic growth in their communities.

Looking Ahead with Confidence

The support provided by Lafayette Square under its new SBLC designation promises to create meaningful opportunities for small businesses, ensuring that those in historically marginalized communities benefit from increased access to financial resources. As more entrepreneurs gain the ability to secure funding, the landscape of business ownership in America evolves positively.

Commitment to Economic Growth

Lafayette Square remains dedicated to investing in middle-market enterprises and positively impacting communities. The firm recognizes the challenges faced by businesses in lower-income areas and actively seeks investment opportunities that stimulate economic development. This mission drives not only their investments but also their commitment to job creation and preservation.

Frequently Asked Questions

What is Lafayette Square's new SBLC license?

The new SBLC license allows Lafayette Square to engage in 7(a) lending, increasing its support for small businesses in underserved markets.

How many licenses has Lafayette Square received from the SBA?

Lafayette Square has received three licenses from the SBA, including two SBIC licenses and now the newly awarded SBLC license.

What are the benefits of the SBLC license?

The SBLC license enables Lafayette Square to use government guarantees, reducing risk for lenders and costs for borrowers, thus facilitating higher loan volumes.

Who leads Lafayette Square?

Damien Dwin is the Founder and CEO of Lafayette Square, emphasizing the firm's goal to provide comprehensive support to small businesses.

Why does the SBA support new lenders?

The SBA aims to fill capital gaps in underserved communities, promoting economic growth and supporting high rates of entrepreneurship in those areas.

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