By Roberta Holland

Female-owned businesses and small businesses with Year 2000 computer problems would get a boost under a bill introduced last week by U.S. Sen. John F. Kerry, D-Mass. The Small Business Loan Enhancement Act of 1998 calls for an increase in the amount available for capital loans for female-owned businesses and emphasizes another loan program that helps small businesses combat the Year 2000 bug, among other things. The bill, which was introduced in the Senate Committee on Small Business last week, would expand the U.S. Small Business Administration's 504 Development Company Program to allow female-owned businesses to draw loans of up to $ 1 million for equipment and expansion of facilities. Currently, female-owned businesses can qualify for 504 loans of up to $ 750,000. Richard Tomeo, acting district director of the SBA's Boston office, said the agency is interested in coming up with incentives to encourage female-owned businesses. "One of the most important things we're seeing is that women are expanding businesses and starting businesses at a faster rate than men are," Tomeo said. Kerry's bill also clarifies that the SBA's 7(a) guaranteed business loan program can be tapped by small businesses seeking financing to make their computer systems handle the year 2000 problem. The bill also seeks to reduce the paperwork and costs associated with real estate transactions through the 504 loan program and the 7(a) guaranteed business loan program. Currently, when more than $ 100,000 of the authorized loan proceeds of a financing package includes real estate, SBA mandates a state-certified or state-licensed appraisal. Kerry's bill would change the threshold to $ 250,000, which Kerry says would result in an estimated savings of $ 1,000 to $ 3,000 per loan. The bill also would boost the SBA's microloan program. The proposal would reduce the lender's loan loss reserve--a cash reserve that ensures the government is paid back if a loan defaults--from 15 percent to 10 percent after five years of successful participation in the microloan program. Each loan loss reserve will be established based on its average loss rate from the previous five years. Andrea Silbert, executive director of the Center for Women & Enterprise, praised the bill's goals. The center is a private, nonprofit organization funded in part by the SBA. "It's very important increasing the (loan) limit for female-owned businesses," Silbert said. She added that the number of female-owned businesses has risen sharply in the last 10 to 15 years, and many of those businesses are now big enough to need access to larger loans. "These will help women expand and grow their businesses," Silbert said. Jeffrey C. Shuman, a professor and director of entrepreneurial studies at Bentley College in Waltham, said any measures to make it easier for small-business owners to get financing is welcome. "I encourage our congressional members to really continue their efforts to make the job of getting funding easier so entrepreneurs can concentrate on growing their business," Shuman said. Kevin Wheeler, a legislative assistant to Kerry, said the bill consists of small but important improvements for small-business owners. "We think they're all important," Wheeler said of the provisions in the bill. "We think the women's portion is important because female-owned businesses make up 40 percent of all businesses, and we know that 14 percent of loans in 1998 went to women and the other (86) percent went to men. There needs to be more equity there." Wheeler also stressed the importance of the lowered threshold for the microloan loss reserve fund, which would result in cost savings for lenders and free up more money for loans. Kerry's bill was passed unanimously in committee this week.