WASHINGTON - The United States Senate today unanimously passed a bill that would give small businesses preparing for or responding to the Year 2000 computer problem access to affordable loans through the U.S. Small Business Administration (SBA)'s 7(a) program. Senator John F. Kerry (D-Mass.), ranking Democrat on the Small Business Committee is an original co-sponsor of the Y2K Readiness Act and was the Democratic floor manager of the bill.
"Small businesses face the same challenges of the Y2K problem as big businesses but they often have little or no resources to develop a workable solution," said Kerry. "This bill would give them access to loans that may mean the difference between success and failure in the year 2000. The legislation will make Y2K loan assistance easy for lenders and timely for borrowers."
The Small Business Year 2000 Readiness Act would expand the 7(a) loan program, one of S.B.A.'s most popular and successful guaranteed lending programs. Currently, the 7(a) program is intended to give credit to small businesses to grow their companies. Under the Act, the 7(a) loans could be used until the end of the year 2000 to address Y2K problems ranging from the upgrade or replacement of date-dependent equipment and software to the survival of economic injury caused by Y2K disruptions such as power outages or temporary gaps in deliveries of supplies and inventory.
In order to give lenders the incentive to provide Y2K loans, this Act would raise the government guaranties for these loans by ten percent and, under limited circumstances, raise the dollar cap for many loan guaranties.