WASHINGTON - Sen. John F. Kerry (D-Mass.) introduced legislation that temporarily extends all Small Business Administration (SBA) programs and addresses several urgent issues critical to keeping small business programs fully functional.
“Without this bill, loans won’t be made to small businesses and jobs won’t be created. Without this bill, 53 women’s business centers are at risk of being closed,” said Kerry, Ranking Member of the Committee on Small Business and Entrepreneurship.
The legislation, S.2186, helps restore the largest small-business loan program in the country, the SBA’s 7(a) program, which was abruptly shut down by the Administration on January 6 when the President’s funding request came up short. The SBA reopened the program January 14 with restrictions that have left many small businesses out in the cold. Since then, the Administration has offered a piecemeal proposal to fix the program and has refused to request additional funding.
“The Administration's plan is yet another budget gimmick, a non-starter. Small businesses and lenders alike have told Congress that it’s not workable, and that they oppose it.” Kerry said. “Small businesses cannot wait any longer. My bill takes the necessary steps to fully restore the 7(a) program without decreasing loan access or pushing lenders away. Lifting the Administration’s loan cap means small businesses, our best job creators, can get back to doing what they do best.”
With the Administration unwilling to request supplemental funding to the program, the bill relies on 7(a) lenders to carry the additional costs. The annual lender fees are adjusted, and a one-time fee is charged to the lender on the portion of the loan not guaranteed by the SBA. For loans of $150,000 or less, the lender will no longer be able to keep 0.25 percent of the upfront fee charged to the borrowers. All fee changes must be used to offset program costs. This solution is supported by small business groups and the lending community.
The bill also makes a change to keep 53 of the most experienced women’s business centers open. These “sustainability” centers make up over half the total centers, but receive only 30 percent of the funds. Kerry’s legislation increases this amount to 48 percent. Without the change, all grants to sustainability centers could be cut in half - or worse, 23 centers could lose funding completely.
In September 2003, the Senate passed its SBA reauthorization bill (S.1375), co-sponsored by Kerry and Chair Olympia Snowe. This extension of SBA programs through May 15, 2004, gives the House of Representatives more time to pass its companion bill.
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“Without this bill, loans won’t be made to small businesses and jobs won’t be created. Without this bill, 53 women’s business centers are at risk of being closed,” said Kerry, Ranking Member of the Committee on Small Business and Entrepreneurship.
The legislation, S.2186, helps restore the largest small-business loan program in the country, the SBA’s 7(a) program, which was abruptly shut down by the Administration on January 6 when the President’s funding request came up short. The SBA reopened the program January 14 with restrictions that have left many small businesses out in the cold. Since then, the Administration has offered a piecemeal proposal to fix the program and has refused to request additional funding.
“The Administration's plan is yet another budget gimmick, a non-starter. Small businesses and lenders alike have told Congress that it’s not workable, and that they oppose it.” Kerry said. “Small businesses cannot wait any longer. My bill takes the necessary steps to fully restore the 7(a) program without decreasing loan access or pushing lenders away. Lifting the Administration’s loan cap means small businesses, our best job creators, can get back to doing what they do best.”
With the Administration unwilling to request supplemental funding to the program, the bill relies on 7(a) lenders to carry the additional costs. The annual lender fees are adjusted, and a one-time fee is charged to the lender on the portion of the loan not guaranteed by the SBA. For loans of $150,000 or less, the lender will no longer be able to keep 0.25 percent of the upfront fee charged to the borrowers. All fee changes must be used to offset program costs. This solution is supported by small business groups and the lending community.
The bill also makes a change to keep 53 of the most experienced women’s business centers open. These “sustainability” centers make up over half the total centers, but receive only 30 percent of the funds. Kerry’s legislation increases this amount to 48 percent. Without the change, all grants to sustainability centers could be cut in half - or worse, 23 centers could lose funding completely.
In September 2003, the Senate passed its SBA reauthorization bill (S.1375), co-sponsored by Kerry and Chair Olympia Snowe. This extension of SBA programs through May 15, 2004, gives the House of Representatives more time to pass its companion bill.
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