WASHINGTON -- A broad range of top Democrats and Republicans in Congress are urging the Small Business Administration (SBA) to keep the agency’s popular 7(a) “LowDoc” loans. The loans, which reduce red tape and streamline lending, are extremely important to small businesses owners in rural states. Since 2001, small business owners in rural states have received over $2.5 billion in loans through the program.

Sen. John F. Kerry (D-Mass.), top Democrat on the Senate Small Business and Entrepreneurship Committee, who joined the Congressional letter in support of LowDoc loans said, “Anything we can do to streamline the government's red tape and stand on the side of small business owners just makes sense. How can this administration talk about an ‘ownership society’ while taking away the tools to make it happen? These loans get repaid to the government, and they're a smart investment in America's entrepreneurs. Without LowDoc loans, small businesses in rural states such as Arkansas and Wyoming will no doubt lose out.”

In their letter to SBA Administrator Hector Barreto, the Senators and Members of Congress expressed concern that the SBA was considering eliminating LowDoc loans and urged the SBA to work with Congress to fix any problems the program may have.

“The SBA 7(a) lending program is becoming more and more concentrated -- the top ten lenders now account for more than 55 percent of the loans,” the letter states. “It is important that the SBA loan programs serve the needs of a broad array of borrowers, with many lenders and in many geographic areas. Combining the several 7(a) sub-programs into a ‘one size fits all’ loan program simply will not help meet the intended purpose of the programs: to reach a diverse group of small businesses that cannot obtain adequate financing elsewhere.”

Over the years, LowDoc loans have accounted for about 20 percent of the loans made through the SBA’s largest loan program, known as 7(a). It reaches small borrowers by offering a guaranty up to 85 percent on loans of $150,000 or less, which are particularly important to rural lenders and small community banks.

The letter was signed by four members of the Senate Committee on Small Business and Entrepreneurship -- Chair Olympia J. Snowe (R-Maine), Ranking Member John Kerry, Christopher “Kit” Bond (R-Mo.) and Mary L. Landrieu (D-La.) -- and the Chairman and Ranking Member of the House Small Business Committee, Donald A. Manzullo (R-Ill.) and Nydia M. Velazquez (D-N.Y.).

To read the full letter visit https://www.sbc.senate.gov/democrat/correspondence.cfm