[Congressional Record Volume 140, Number 86 (Thursday, June 30, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 30, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
   INTRODUCTION OF LEGISLATION TO CREATE THE PREMIER LENDERS PROGRAM

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                          HON. JOHN J. LaFALCE

                              of new york

                    in the house of representatives

                        Thursday, June 30, 1994

  Mr. LaFALCE. Mr. Speaker, I rise today as chairmman of the Small 
Business Committee to introduce legislation that will facilitate the 
administration of the certified development company loan program 
administered by the Small Business Administration.
  This is one of two bills that I introduce today that will become part 
of the pending legislation to reauthorize the Small Business 
Administration. That legislation is currently under consideration in my 
committee.
  My bill addresses concerns that many in the small business community 
have had regarding the timeliness of SBA approval for certain loans. 
The premier lender program will allow the best lenders who are 
providing long-term loans for plant and equipment financing under the 
certified development company program to process the applications of 
borrowers with excellent credit reports faster. Under the new premier 
lender program, these lenders will completely process and approve SBA 
loans without prior approval from the SBA. Premier lenders must agree 
to assume 5 percent of the risk of the loan.
  The premier lender program is meant for lenders and borrowers who 
have an excellent established track record with the Small Business 
Administration. It is meant to reduce the paperwork and time involved 
in the loan approval process. It is patterned after the highly 
successful preferred lenders program under which financial institutions 
can quickly issue SBA guarantees on the best 7(a) loan applications.
  A summary of the legislation is attached.

       H.R. __________ would authorize the Small Business 
     Administration to establish a premier lenders program under 
     the certified development company program.
       SBA would delegate to these lenders the authority to 
     approve debenture guarantees, and the underlying loans to 
     small businesses for plant and equipment, without prior SBA 
     approval. The premier lender be required to assume the 
     responsibility for and reimburse the SBA for 5 percent of any 
     losses resulting from loans and debenture guarantees issued 
     without the SBA's prior approval.
       The program would be established on a pilot basis and 
     repealed in five years.

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