The Small Business Administration reached its $18.75 billion cap for its main loan guaranty program at noon on Thursday, halting the funding of all 7(a) loans.
Those are the loans that the SBA backs up with third-party lenders on behalf of small-business owners. The program often guarantees loans to underserved communities including women, Latinos and veterans.
SBA Administrator Maria Contreras-Sweet requested assistance from Congress in late June, aiming to avoid a temporary shutdown of the program, and asked to lawmakers to raise the program cap to $22.5 billion for the 2015 fiscal year.
The SBA originally expected to hit the lending ceiling in late August, but record lending in July sped up the timeline.
"Since the beginning of July alone, we have seen over $3 billion in loans, with $1.7 billion in this past week," Miguel Ayala, SBA's press secretary, told CNBC on Thursday.
July's rush marks a fivefold increase over the normal volume, according to the SBA, which has granted more than 50,000 loans through the 7(a) program this year.
Ayala says the increase in lending is a sign of confidence in small businesses and strength in the economy. He also noted that Contreras-Sweet's letter to Congress probably spurred entrepreneurs to apply for loans before the program reached its cap.
The SBA saw a similar increase in small-business loans in September of last year, but an increase in the program cap prevented a halt in lending.
"As you will recall, this is a zero-subsidy request," Contreras-Sweet wrote in her letter to Congress. "The 7(a) Program is currently operating without appropriated subsidy funds and would continue to do so at the requested program level."