Who is affected and how:

• For‑profit small business lending companies: Directly affected; the pool of companies that may be authorized to make loans under section 7 is limited to 16. Existing authorized companies may retain status, but the cap can block new authorizations and may require revocation or nonrenewal decisions if authorizations exceed the cap.

• Small businesses seeking section 7 loans: Indirectly affected; fewer authorized for‑profit lenders could reduce the number of lending sources, potentially reducing competition or geographic/sector coverage, which may affect access or terms offered by remaining authorized lenders. The bill does not change borrower eligibility or loan program rules.

• Small Business Administration (SBA): Bears administrative responsibility to track, authorize, and enforce the cap. SBA may need to develop procedures or regulations to determine how authorizations are allocated, renewed, or revoked, creating administrative work without specified additional funding.

• Other financial institutions and lenders: May be affected competitively. Non‑profit or other types of lenders not covered by the cap are unaffected directly, which could shift market dynamics.

• Market and competition effects: The cap could concentrate lending authority among a limited number of firms, which may lower competition among authorized for‑profit lenders for SBA‑backed business borrowers. This could have local or sectoral implications where authorized lenders are thinly distributed.

Limitations and uncertainties:

• The provision sets a numeric limit but provides no detail on selection, prioritization, grandfathering of current authorizations, or how the SBA should handle tied applications or revocations. These implementation details would be decided administratively or by later rulemaking.
• No funding, transitional provisions, or specified effective date are included in the provided text, leaving open timing and administrative resource questions.