WASHINGTON – United States Senate Committee on Small Business and Entrepreneurship Chair Mary Landrieu, D-La., and Ranking Member Olympia J. Snowe, R-Maine, today commented on President Barack Obama’s ambitious new plan to increase access to capital for small businesses. Chair Landrieu and Ranking Member Snowe joined Congressional lawmakers, business leaders and community bankers in a meeting with the President this morning to discuss the plan, which will take immediate steps to unlock frozen credit markets, temporarily roll back lending fees and bolster bank liquidity to ensure small firms can have continued access to credit.
“President Obama and Secretary Geithner have laid out a bold, ambitious agenda aimed at encouraging lending to small businesses, the engines of economic recovery,” Chair Landrieu said. “The financial crisis has hit small businesses where it hurts the most – drying up access to capital as banks are becoming more hesitant to lend. The frozen secondary market for SBA-backed 7(a) and 504 loans has discouraged new lending to small businesses, but the Obama Administration’s plan to purchase SBA-backed 7(a) and 504 loans will allow banks to leverage existing SBA loans to provide new loans to entrepreneurs looking to grow and create more jobs.
“By increasing the SBA loan guarantee to 90 percent and temporarily eliminating fees on 7(a) and 504 loans, President Obama’s plan will reduce the risk lenders face when they make new loans while making those loans more affordable to small business owners. I was proud to work with my colleagues on the Appropriations Committee to get these provisions included in the American Recovery and Reinvestment Act. By getting capital flowing again to small businesses, we will help get the country out of the economic crisis. Washington must focus on small businesses. I look forward to chairing a hearing of the Small Business Committee on Thursday that will look into the factors that have caused many entrepreneurs to be shut out of vital credit markets. The President’s announcement today proves that he also understands the importance of small businesses to our economy,” Chair Landrieu said.
“I am pleased that President Obama has called today’s summit to address the credit crisis that is preventing our nation’s small businesses from accessing the capital so vital to maintaining and expanding their operations,” said Senator Snowe. “Today’s implementation of critical provisions that Senator Landrieu and I fought to include in the American Reinvestment and Recovery Act to provide fee relief to borrowers and lenders in the SBA’s 7(a) and 504 loan programs, as well as an increased guarantee rate for 7(a) loans, comes not a moment too soon. The President’s willingness to use TARP funds to directly purchase SBA loan pools, which I have expressed my support for with the Administration, is a much-welcome step that will provide liquidity into secondary markets and generate additional financing dollars for small businesses nationwide.”