WASHINGTON – The Senate Small Business Committee today unanimously approved a bill that included a key provision added by United States Senator Mary L. Landrieu, D-La., a member of the committee. The provision would create a short-term bridge loan partnership between the Small Business Administration (SBA) and the states to fast track money to small businesses impacted by major disasters.

Sen. Landrieu’s provision, included in the bill reauthorizing the Small Business Administration, would allow states with SBA pre-approved bridge loan programs to provide these loans with an SBA guarantee after disaster strikes. The provision, which creates a federal-state partnership on short-term disaster assistance, builds upon successful state bridge loan programs in Louisiana, Florida and Mississippi following the 2005 hurricanes.

“After Hurricanes Katrina and Rita, businesses were forced to wait six months or more to receive critical SBA assistance,” Sen. Landrieu said. “I commend the SBA for making improvements since the hurricanes, but more tools are needed to effectively respond to business needs after disasters.”

Also included in the bill is a provision by Sen. Landrieu directing the SBA to fill the vacant International Finance Specialist position in New Orleans, which has been open since 2003. This specialist would help Gulf Coast small businesses impacted by Hurricanes Katrina and Rita to access export financing, thereby keeping businesses in Louisiana, Mississippi and Alabama competitive in the international market.

“Access to capital is still a major problem for our recovering Gulf Coast small businesses,” Sen. Landrieu said. “Filling the vacant finance specialist position is an important first step to providing our exporting businesses the support they need to compete on a global scale.”

Sen. Landrieu worked closely with Sen. Olympia Snowe, R-Maine, chairwoman of the Senate Small Business Committee, and Sen. John Kerry, D-Mass., the ranking member, to include her provisions in the SBA reauthorization bill.

The Senate’s bill also includes several other Sen. Landrieu provisions that would:

  • Require that the SBA study ways to expedite disaster loans to major businesses that provide jobs that are vital to disaster recovery efforts.

  • Increase the SBA collateral requirement on approved disaster loans, raising it from $10,000 to an inflation-adjusted figure of $12,000. Following Hurricanes Katrina and Rita, the SBA could not disburse more than $10,000 on approved loans to borrowers before requiring collateral to disburse additional funds.

  • Provide permanent authority for the SBA to enter into contracts with private lenders and credit unions for loss verification and loan processing services.

  • Improve the SBA’s International Trade Loan program to make it less bureaucratic and more user-friendly to lenders and borrowers. In particular, the provision increases the maximum SBA loan guarantee amount to $2.75 million and the loan cap to $3.67 million, and also makes the program consistent with SBA regular 7(a) loans in terms of refinancing and collateral requirements.

  • Establish a national minimum of 18 for the number of International Finance Specialists employed by the SBA to stop further downsizing of the program.

The bill is now headed for consideration by the full Senate. The House has yet to act on its version of the bill.