FOR IMMEDIATE RELEASE
WASHINGTON -- Sen. John F. Kerry (D-Mass.), Ranking Member of the Committee on Small Business and Entrepreneurship, today introduced legislation that would update and improve the microenterprise programs administered by the Small Business Administration (SBA). Specifically, Kerry’s bill makes necessary changes to the SBA’s Microloan program and the Program for Investment in Microentrepreneurs (PRIME).
“The Microloan program and PRIME are essential to very small startups, low-income entrepreneurs and home-based businesses,” Kerry said. “Eliminating this assistance, as President Bush has tried to do for several years, would leave many of America's neediest small businesses with nowhere to turn. Instead of cutting off small businesses, we should strengthen these programs and keep our commitment to America's micro-entrepreneurs.”
Kerry’s bill, the SBA Microenterprise Improvements Act combines two sections that were included in the SBA reauthorization bill (S.1375) that passed the Senate during the last Congress.
The Microloan section of the legislation makes several necessary and long-overdue changes. First, it makes the financing more flexible, streamlines paperwork, and reduces administrative burdens by allowing lenders to offer revolving and longer term loans. Small businesses, such as carpenters, need revolving loans to finance the jobs as they come in, rather than applying for multiple little, fixed-term loans. Second, the bill would make it possible for new entities to qualify as an SBA microlender by showing that they have the necessary qualified staff, rather than tying eligibility to institutional expertise. Third, the legislation would change the average smaller size of microloans from $7,500 to $10,000, in qualifying for lower interest rates. Fourth, it would increase, from 25 percent to 30 percent, the amount of technical assistance funds an intermediary can contract with an outside expert and the amount of grants a lender can use to counsel prospective borrowers. Last, the bill requires the SBA to update it outmoded subsidy rate model to determine the current cost of funding microloans.
The PRIME section reauthorizes the current program and expands it to target assistance and help disadvantaged Native American entrepreneurs receive the in-depth technical assistance and counseling they need to start and grow new businesses.
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WASHINGTON -- Sen. John F. Kerry (D-Mass.), Ranking Member of the Committee on Small Business and Entrepreneurship, today introduced legislation that would update and improve the microenterprise programs administered by the Small Business Administration (SBA). Specifically, Kerry’s bill makes necessary changes to the SBA’s Microloan program and the Program for Investment in Microentrepreneurs (PRIME).
“The Microloan program and PRIME are essential to very small startups, low-income entrepreneurs and home-based businesses,” Kerry said. “Eliminating this assistance, as President Bush has tried to do for several years, would leave many of America's neediest small businesses with nowhere to turn. Instead of cutting off small businesses, we should strengthen these programs and keep our commitment to America's micro-entrepreneurs.”
Kerry’s bill, the SBA Microenterprise Improvements Act combines two sections that were included in the SBA reauthorization bill (S.1375) that passed the Senate during the last Congress.
The Microloan section of the legislation makes several necessary and long-overdue changes. First, it makes the financing more flexible, streamlines paperwork, and reduces administrative burdens by allowing lenders to offer revolving and longer term loans. Small businesses, such as carpenters, need revolving loans to finance the jobs as they come in, rather than applying for multiple little, fixed-term loans. Second, the bill would make it possible for new entities to qualify as an SBA microlender by showing that they have the necessary qualified staff, rather than tying eligibility to institutional expertise. Third, the legislation would change the average smaller size of microloans from $7,500 to $10,000, in qualifying for lower interest rates. Fourth, it would increase, from 25 percent to 30 percent, the amount of technical assistance funds an intermediary can contract with an outside expert and the amount of grants a lender can use to counsel prospective borrowers. Last, the bill requires the SBA to update it outmoded subsidy rate model to determine the current cost of funding microloans.
The PRIME section reauthorizes the current program and expands it to target assistance and help disadvantaged Native American entrepreneurs receive the in-depth technical assistance and counseling they need to start and grow new businesses.
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