To reach that goal, it expanded its sales force and branch network to take advantage of SBA lending opportunities on a national scale. The company let the license remain dormant, but reactivated it in 1995. First Union Corp. It remains to be seen whether Citigroup will retain the license. The fate of that license would be unlikely to factor in so large a deal as Citigroup s acquisition of Associates. The licenses have become less attractive assets for a number of reasons, including recently available alternatives to SBA or risk-reduced lending.
Some states now grant special charters that allow nonbanks to conduct commercial lending activities.
At least one company has begun offering insurance for loans that might be eligible for government guarantees, which banks and nonbanks alike might opt to purchase to reduce risk rather than going through the red tape involved in SBA lending. First Union s acquisition of the former Money Store has been difficult, at best. First Union s troubles after buying a specialty lender, not to mention the difficulties currently facing by many other specialty lenders, might have militated against Citigroup s interest in Associates. Associates businesses will take on the Citi brand at the deal s completion, expected at the end of 2000.