WASHINGTON - United States Senator Mary Landrieu, D-La., Chair of the Senate Committee on Small Business and Entrepreneurship, commented on the small business assistance provisions of the American Recovery and Reinvestment Act that was marked up by the Appropriations Committee today.
“The economic stimulus package includes essential provisions that will help jumpstart lending for small businesses nationwide,” Sen. Landrieu said. “By reducing fees on government-backed small business loans, the bill will make new loans more affordable so small businesses can grow and succeed, creating jobs and strengthening the economy.”
The stimulus bill includes $515 million to temporarily eliminate fees associated with 7(a) loans, the most common type of SBA-backed loan. Reducing lender fees will help reverse the downward trend in 7(a) lending, stimulating as much as $15 billion in small business loans. Last fiscal year, 7(a) loans decreased by more than $1.6 billion, or more than 30,000 loans. This fiscal year, 7(a) lending is already down by more than 56 percent.
The package also appropriates $100 million for the temporary waiver of fees on 504 loans, which provide long-term financing to small businesses that are expanding and need to buy equipment, facilities or other fixed assets. 504 loans are down 42 percent this fiscal year compared to this time last year. This funding is estimated to stimulate as much as $5 billion in small business loans.
The bill includes funding for the SBA’s Microloan Program, which provides very small loans to qualifying small businesses. It includes $6 million for the program to handle the increase in demand from micro-businesses that have been crowded out of other financing sources as a result of the credit crisis. This funding will leverage an additional $51 million in microloans, creating or retaining an estimated 10,000 jobs. The bill also provides $24 million for complementary counseling.
To provide accountability, the package contains $10 million for the SBA Inspector General’s oversight of SBA stimulus funds and $15 million for increased lender oversight.
“The small business provisions in the stimulus package are certainly steps in the right direction, but there is still much work left to be done,” Sen. Landrieu said. “I am looking forward to the Small Business Committee roundtable on Thursday where we will focus on what is necessary to further stimulate growth and job creation among the nation’s small businesses, the engines of our economy.”