Washington, D.C. - Yesterday, Senate Small Business and Entrepreneurship Committee Chairman Jim Risch (R-ID), House Small Business Committee Chairman Steve Chabot (R-OH), House Ranking Member Nydia Velázquez (D-NY) and U.S. Senator Jeanne Shaheen (D-NH) applauded the passage of their Small Business 7(a) Lending Oversight Reform Act of 2018 from both the Senate and House small business committees. This bipartisan, bicameral legislation will increase the Small Business Administration’s (SBA) oversight authority over the 7(a) loan program and now goes before both bodies for consideration.
“The unanimous passage of this bill from both committees underscores how important the 7(a) program, and the capital it provides, is to our nation’s small business owners,” said Senator Risch. “This bill will ensure SBA has the tools it needs to oversee this growing program, provide lenders with needed clarity, and make sure entrepreneurs and small business owners have access to funds they would otherwise not be able to obtain."
“The 7(a) Loan Program remains one of the SBA’s most significant because it fills an important gap for small business owners in need of capital who may be struggling to get it otherwise. Our legislation will allow the SBA to keep a closer watch on the program to make sure it is running effectively, while also continuing to run it at a zero cost to taxpayers. The fact that both the House and Senate, and both sides of the aisle, are supporting this legislation is a testament to how critical it is to help the small business owner succeed and grow,” said Chairman Chabot.
“When it comes to helping entrepreneurs secure reliable capital, the 7(a) program is a linchpin in the small business economy,” said Ranking Member Velázquez. “The reforms contained in this bill will help ensure the program operates even better, helping more small firms obtain affordable credit to grow their operations and create jobs. I’m particularly pleased by the provisions in this bill granting SBA flexibility to raise their lending authority cap to avoid the program temporarily going off line when there’s unexpected loan volume. I especially want to thank Chairman Chabot for his leadership and for working in such a collaborative manner on this bill. I also want to applaud Senators Risch, Shaheen and Cardin for making this process both bipartisan and bicameral.”
“Small businesses are the engine that drives New Hampshire’s economy, and the SBA’s 7(a) loan program plays a critical role in providing those businesses with the resources they need to succeed,” said Senator Shaheen. “I’m pleased by the bipartisan and bicameral support for this bill, and will continue to work across the aisle to push forward legislation that helps Granite State business owners access the capital they need to expand their companies and workforce.”
This bill is supported by the Independent Community Bankers of America (ICBA), the National Association of Government Guaranteed Lenders (NAGGL), the American Bankers Association (ABA), the National Association of Federally-Insured Credit Unions (NAFCU), the U.S. Chamber of Commerce and the Consumer Bankers Association.
The 7(a) loan program is a Small Business Administration (SBA) program that helps entrepreneurs and small businesses access credit to start and grow their businesses when they are unable to get a conventional loan. The Small Business 7(a) Lending Oversight Reform Act of 2018 preserves this important loan program by:
• Strengthening SBA’s Office of Credit Risk Management by outlining in statute the responsibilities of the office and the requirements of its director;
• Enhancing SBA’s lender oversight review process, including increasing the office’s enforcement options;
• Requiring SBA to detail its oversight budget and perform a full risk analysis of the program on an annual basis;
• Strengthening SBA’s Credit Elsewhere Test by clarifying the factors that must be considered.