WASHINGTON - Senator John F. Kerry (D-Mass.), Chairman of the Committee on Small Business and Entrepreneurship, and the Committee's Ranking Member, Senator Christopher (Kit) Bond (R-Mo., today sent a letter to Mitchell E. Daniels Jr., Director of the Office of Management and Budget (OMB), requesting a resolution to the overestimated credit subsidy cost of the Small Business Administration's (SBA) 7(a) Guaranty Loans. The bi-partisan effort encouraged a resolution to this matter by the beginning of the next fiscal year, October 1, 2001, to avoid overcharging small business borrowers and lenders in the upcoming year.
"The overestimation of government loan fees by the Small Business Administration has cost small business borrowers and lenders over nine hundred million dollars over the past nine years - all due to a faulty calculation of costs. This is unacceptable and I demand an immediate solution to a problem that has persisted far too long," said Senator John F. Kerry (D-MA).
On Wednesday, September 5, 2001, the Senate Committee on Small Business and Entrepreneurship conducted a Roundtable on the credit subsidy rates for the Small Business Administration's (SBA) 7(a) guaranteed business loan program. The purpose of the Roundtable was to review a recent report from the General Accounting Office (GAO) which concluded that SBA has overestimated the credit subsidy cost of the 7(a) program by $958 million since Fiscal Year 1992. GAO further concluded that the overestimate of defaults -- by about 87 percent -- was the prime reason for the inaccurate credit subsidy rates.
"The overestimation of government loan fees by the Small Business Administration has cost small business borrowers and lenders over nine hundred million dollars over the past nine years - all due to a faulty calculation of costs. This is unacceptable and I demand an immediate solution to a problem that has persisted far too long," said Senator John F. Kerry (D-MA).
On Wednesday, September 5, 2001, the Senate Committee on Small Business and Entrepreneurship conducted a Roundtable on the credit subsidy rates for the Small Business Administration's (SBA) 7(a) guaranteed business loan program. The purpose of the Roundtable was to review a recent report from the General Accounting Office (GAO) which concluded that SBA has overestimated the credit subsidy cost of the 7(a) program by $958 million since Fiscal Year 1992. GAO further concluded that the overestimate of defaults -- by about 87 percent -- was the prime reason for the inaccurate credit subsidy rates.
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