U.S. Senate Committee on Finance ranking member presses SBA over merchant cash advances charging up to 94% and June 2025 refinancing ban

U.S. Senate Committee on Finance Ranking Member Ron Wyden and Senate Small Business and Entrepreneurship Committee Ranking Member Edward J. Markey sent a letter to Small Business Administration Administrator Kelly Loeffler asking why the agency did not adequately warn small businesses about predatory merchant cash advances and why it changed policy in June 2025 to prohibit Small Business Administration loans from refinancing that debt. The lawmakers linked the issue to businesses facing liquidity pressure after the April 2025 tariffs and pointed to reports that merchant cash advance providers used opaque terms, substantial upfront fees and aggressive same-day cash pitches, with hidden annual rates of up to 94%. The request seeks records on interagency coordination with the Office of the United States Trade Representative and Customs and Border Protection on small-business liquidity preparedness tied to IEEPA tariff actions, internal assessments of the Small Business Administration's ability to meet urgent working-capital needs, and any outreach warning firms about merchant cash advance risks and safer alternatives. It also asks how merchant cash advance debt is treated in underwriting, whether any policies exist or are planned to permit refinancing of that debt, and for data and internal policy materials explaining the June 2025 standard operating procedure restriction. The senators requested answers by May 28.