On April 12, the SBA published a final rule in the Federal Register lifting the moratorium on licensing new nondepository small business lending companies (SBLCs) and adding a new type of entity called a “Community Advantage SBLC.” The moratorium was imposed in 1982, after the agency determined it lacked adequate resources to effectively service and supervise additional SBLCs participating in SBA’s 7(a) loan program beyond the 14 it was authorized to approve. According to SBA, while the majority of 7(a) lenders are federally-regulated depository institutions, “SBLCs are regulated, supervised, and examined solely by SBA” and “are subject to specific regulations regarding formation, capitalization, and enforcement actions.” SBA explained that there are capital market gaps in certain markets that “continue to struggle to obtain financing on non-predatory terms.” The final rule lifts the licensing moratorium and eliminates the cap on the number of nondepository institutions in the program. The final rule also creates the Community Advantage SBLC to help bridge the financing gap that small businesses face in the private market. Community Advantage SBLCs are nonprofit organizations that will be licensed to make 7(a) loans to small businesses and will help SBA meet the needs of underserved communities. SBA also revised its regulations to remove the requirement for a separate loan authorization document to “eliminate the duplication of effort and opportunity for a mismatch of information between multiple sources of the loan terms and conditions.” The final rule is effective May 12.