WASHINGTON – United States Senate Committee on Small Business and Entrepreneurship Chair, Mary L. Landrieu, D-La., plans to introduce a bill today increasing limits on small business loans. The bill comes after months of talking with small business owners and lenders and in conjunction with an announcement earlier today by President Obama that new measures were underway to increase small business access to capital and create jobs:
“Since Congress passed and the President signed the American Recovery and Reinvestment Act, we have taken several steps to support small businesses, including eliminating loan fees – a provision I helped spearhead,” Senator Landrieu said. “These changes have helped to give more small businesses the capital they need to stock their shelves and pay their employees. But as President Obama said today, we must do everything in our power to aid our nation’s innovators and job creators to ensure their success and our nation’s future competitiveness.
“As Chair of the Senate Small Business Committee, I have held several hearings, roundtables and other events and have heard from lenders and small business owners that the current loan limits do not adequately meet their needs. That is why today I am introducing legislation to raise the limits on small business loans to as high as $5.5 million. Coupled with lower-cost capital available to community lenders, these higher loan limits will spur small business growth and aid in our nation’s continued economic recovery.”
Senator Landrieu, an active member of the Senate Small Business Committee since becoming a Senator in 1997 and the Chair of the Committee since January, has supported increasing the loan limits on Small Business Administration (SBA) loans for the past two Congresses. She voted for raising the limits in the last two SBA Reauthorization bills. Senator Landrieu has also chaired five Committee hearings or roundtables on small business lending since becoming Chair in January. Most recently, Senator Landrieu led a Recovery Act oversight hearing on October 6 to discuss steps moving forward. Raising the limits was a main focus of this hearing.
The hearings and roundtables on lending Senator Landrieu Chaired this year include (click title for more details):
• October 6, 2009 – Hearing: The Recovery Act for Small Businesses: What is Working and What Comes Next?
• October 11, 2009 – Roundtable: Reauthorization of SBA Finance Programs and the Impact of the Small Business Provisions in the Recovery Act.
• May 13, 2009 - Hearing: Progress Report on Recovery Act Implementation and Alternative Sources of Financing.
• March 19, 2009 – Hearing: Perspectives from Main Street on Small Business Lending.
• January 29, 2009 – Hearing: Investing in Small Business: Jumpstarting the Engines of Our Economy.
The bill being introduced today:
• Increases the maximum 7(a) loan to $5 million (up from a maximum of $2 million).
• Increases the maximum 504 loan to $5.5 million (up from a maximum of $1.5 million).
• Increases the maximum microloan to $50,000 (up from a maximum of $35,000).
• Enhances refinancing of 504 loans.
• Allows microloan intermediaries to have greater access to technical assistance grants.
• Increases the amount that a New Market Venture Capital Company can invest in any one company, helping fast-growing businesses located in areas with chronic underemployment.
• Removes Small Business Innovation Research/Small Business Technology Transfer (SBIR/STTR) contracting exemption that was included in the Recovery Act.
• Allows ARC loans to be used to help borrowers with existing 7(a) loans.