[Congressional Record Volume 150, Number 29 (Tuesday, March 9, 2004)]
[Senate]
[Pages S2446-S2448]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DASCHLE (for Mr. Kerry):
  S. 2186. A bill to temporarily extend the programs under the Small 
Business Act and the Small Business Investment Act of 1958, through May 
15, 2004, and for other purposes; to the Committee on Small Business 
and Entrepreneurship.
  (At the request of Mr. Daschle, the following statement was ordered 
to be printed in the Record.)
 Mr. KERRY. Mr. President, today I introduce legislation that 
keeps the Small Business Administration and its financing and 
counseling assistance available to small businesses. Small businesses 
need us to act now to keep critical assistance available to our 
Nation's biggest job creators.
  There should not be any objections to this bill. It has broad support 
in the small business and the lending communities. The lending 
provisions of the bill have the support of small borrowers that 
testified before Congress over the past few weeks and the support of a 
coalition of small business trade associations, including the trade 
associations of 504 lenders and of 7(a) lenders, the American Bankers 
Association and the Independent Community Bankers Association, as well 
as the National Small Business Alliance and the U.S. Chamber of 
Commerce, and the women's business center provisions have the support 
of women's trade associations such as Women Impacting Public Policy and 
the Association of Women's Business Centers.
  This bill authorizes the SBA and most of its programs through the May 
15, 2004, which will allow time for the House to complete its work on 
the SBA's 3-year reauthorization bill, passed by the Senate in 
September 2003. In addition, this bill addresses several urgent issues 
that are critical to keep SBA programs operating and helping small 
businesses across the country.
  Let me outline these for you. The first provision authorizes the 
continued operation of the SBA's 504 loan guarantee program for the 
rest of fiscal year 2004. Unless we act, the authority to operate this 
program will expire on March 15, next Monday, and small businesses in 
need of financing for fixed assets will be turned away. These loans are 
for growing small businesses that need loans with long repayment terms 
and fixed interest rates to afford a new building or perhaps land to 
expand their business and their workforce, or equipment to improve or 
increase production. The lenders who make these loans serve a unique 
role in our economy--they develop economic opportunities where 
conventional lenders are not willing to take a risk. They are not a shy 
group, and care deeply about the communities where they live. I am sure 
most, if not all, Senators have received numerous calls and 
communications from them over the past few weeks. It is my hope that 
extending authorization will provide some stability to the industry so 
that they continue to fund our growing businesses, and then in the near 
future, the House will consider our more comprehensive SBA 
reauthorization legislation, bill number S. 1375, that we passed in 
September, to enact other important 504 program improvements that are 
supported by the small business community. This loan program requires 
no appropriations because it is funded entirely by fees that borrowers 
and lenders pay.
  The second provision keeps open the doors of our most experienced and 
successful Women's Business Centers, again without added cost to the 
Treasury. This bill contains a small adjustment to the Women's Business 
Center program that updates the current funding formula. The adjustment 
changes the portion of funding allowed for women's business centers in 
the sustainability part of the program to keep up with the increasing 
number of centers that will need funding this fiscal year. In short, 
this change directs the SBA to reserve 48 percent of the appropriated 
funds for the sustainability centers, instead of 30 percent, which will 
give the most experienced centers the greatest opportunity to receive 
sustainability funding, while still allowing for new centers and 
protecting existing ones.
  Currently there are 88 women's business centers. Of these, 35 are in 
the initial grant program and 53 will have graduated to the 
sustainability part of

[[Page S2447]]

the program. These sustainability centers make up more than half of the 
total women's business centers, but under the current funding formula 
are only allotted 30 percent of the funds. Without the change to 48 
percent, all grants to sustainability centers could be cut in half--or 
worse, 23 experienced centers could lose funding completely. Cutting 
funding for these, our most efficient and successful centers, would not 
only be detrimental to the centers themselves, but also to the women 
they serve, to their local communities, to their states, and to the 
national economy.
  As the author of the Women's Business Centers Sustainability Act of 
1999, I can tell you that when the bill was signed into law, it was 
Congress's intent to protect the established and successful 
infrastructure of worth, performing centers. The law was designed to 
allow all graduating Women's Business Centers that meet certain 
performance standards to receive continued funding under sustainability 
grants. This approach allows for new centers to be established--but not 
by penalizing those that have already demonstrated their worth. It was 
our intention to continue helping the most productive and well-equipped 
women's business centers, knowing that demand for such services was 
rapidly growing.
  Today, with women-owned businesses opening at one-and-a-half times 
the rate of all privately held firms, the demand and need for women's 
business centers is even greater. Until Congress makes permanent the 
Women's Business Center Sustainability Pilot program, as intended in 
Senate-passed legislation, an extension of authority and increase in 
sustainability funds is vital--not only to the centers themselves, but 
to the women's business community and to the millions of workers 
employed by women-owned businesses around the country.
  The importance of the women's business centers to small business 
owners in communities across this country cannot be overstated. Take 
for instance the story of Melanie Marsden and Shannon Lawler, who 
recently opened A Better Place to Be Day Spa in Charlestown, MA. While 
working on a business plan last summer, the two hopeful entrepreneurs 
happened across the website of the Center for Women and Enterprise 
(CWE), a women's business center in Boston. Having just signed a lease 
and with a target opening for their spa quickly approaching, Melanie 
and Shannon were looking for help, and quick. At first, the process 
seemed overwhelming, but the experts at CWE were able to guide Melanie 
and Shannon through the complicated process--from business plan to 
long-term financing and management. CWE helped Melanie and Shannon open 
A Better Place to Be Day Spa and already see a steady stream of clients 
pass through their doors. Without CWE, Melanie and Shannon believe that 
they would not have opened their business on time, or at all. Last year 
alone, women's business centers like CWE helped over 100,000 
entrepreneurs just like Melanie and Shannon with their small business 
needs. The majority of these women have few resources and little access 
to business development assistance, and without the women's business 
centers, they might have none.
  As I have said on more than one occasion, women business owners do 
not get the recognition they deserve for the contribution to our 
economy: Eighteen million Americans would be without jobs today if it 
weren't for these entrepreneurs who had the courage and the vision to 
strike out on their own. For 19 years, as a member of the Senate 
Committee on Small Business and Entrepreneurship, I have worked to 
increase the opportunities for these enterprising women, leading to 
greater earning power, financial independence and asset accumulation. 
For these women, in addition to the challenge and experience of running 
their own business, it means having a bank account, buying a home, 
sending their children to college, and being in control of their own 
future.

  I want to again express my sincere and continuing support for the 
growing community of women entrepreneurs across the Nation and for the 
invaluable programs through which the SBA provides women business 
owners with the tools they need to succeed. For years, I have fought 
for increased funding for SBA assistance that helps women 
entrepreneurs, including measures that have sustained and expanded the 
Women's Business Centers, and give women entrepreneurs their deserved 
representation within the Federal procurement process.
  The third provision makes temporary changes to the SBA's largest loan 
program, the so-called 7(a) program, in order to compensate for the 
administration's budget gimmicks and program mismanagement that caused 
a substantial shortage in funding. This shortage led to a temporary 
shutdown of the program in January, followed by lending restrictions 
that created serious financial hardships for small businesses and 
reduced access to affordable capital for small businesses in general. 
For the remainder of fiscal year 2004, a coalition of 7(a) lenders and 
small business groups have worked with Congress to come up with some 
limited fees, paid by lenders and not borrowers, that will increase the 
amount of lending available. That extra funding will increase from $9.5 
billion to more than $11 billion the amount of loan guarantees 
available to small businesses. With more funding, Congress expects the 
SBA to lift the loan cap size of $750,000 and other restrictions, give 
priority in processing and approval to eligible small businesses that 
have been shut out this year, and require the SBA to renew export 
working capital loans to eligible small businesses.
  Of course, these changes would not be necessary if the administration 
had either requested adequate funding in its budget or used its 
authority to reprogram money to compensate for the shortfall. It also 
could have sent up a request for supplemental funding. On three 
different occasions, I wrote to the administration urging these 
actions, with the support of Senators Levin, Harkin, Lieberman, 
Landrieu, Edwards, Cantwell, Bayh, and Pryor, urging any of these 
solutions, but the administration refused to act. Instead, the 
insufficient funding was compounded by mismanagement and the program 
was completely shutdown from January 6 to January 14. When the 
administration reopened the program, it was with extreme restrictions. 
The restrictions were aimed at keeping the demand for the loans down 
without regard to their effect on the small businesses the Agency is 
intended to serve. Small businesses appealed to the administration and 
our committees for help because they were caught in the middle. For 
example, one company in Pennsylvania has a $1 million export working 
capital loan that needs to be renewed, but it can't because one of 
SBA's restrictions does not allow loans of more than $750,000. At risk 
is the home of one of the owners because it is part of the collateral 
securing the existing loan. This company is qualified; it's just 
trapped by the SBA's restrictions. With your help in passing this bill 
immediately, we can do the right thing for these small business owners 
and others who played by the rules. There is no cost to the Treasury in 
enacting these provisions.
  Last, the fourth provision, addresses an urgent need for some firms 
in New York needing disaster loan assistance. Many have said we should 
wait until we address other SBA legislation in the next 60 days. 
However, hundreds of jobs are at stake and these businesses do not have 
2 months. This language is included at the bipartisan request of the 
House Small Business Committee leadership. Their staffs worked closely 
with the SBA to develop this language, which is acceptable to all of 
them. In addition to the support of House Committee Chairman Don 
Manzullo and Ranking Member Nydia Velazquez, this provision is also 
supported by Congresswoman Sue Kelly and Senator Charles Schumer.
  All four provisions address circumstances that require immediate 
action. Let me remind everyone: Without this legislation, the SBA's 
loan program for growing businesses, commonly referred to as the 504 
Loan Guarantee Program, would shut down next Monday, March 15, 2004. 
Without this legislation, the future of counseling and training for 
women starting and growing their businesses, through the most 
established SBA's Women's Business Centers, would be compromised. 
Without this legislation, small businesses with their homes and life 
savings at stake may face financial and personal devastation because of 
program mismanagement. Without this

[[Page S2448]]

legislation, small business disaster victims may go out of business.
  Mr. President, I ask unanimous consent that two letters relating to 
programs affected by this legislation be printed in the Record. I thank 
my colleagues for their support of small businesses and for considering 
immediate passage of this important small business bill.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                 A Better Place to Be Day Spa,

                                                  Charlestown, MA.
       Dear Senator Kerry: This past summer I had the opportunity 
     to work with the Center for Women & Enterprise when I was in 
     the beginning stages of writing a business plan for a small 
     day spa that had long been a dream. My business partner and 
     childhood friend and I were both born to working class 
     families and raised in Charlestown. I was educated in the 
     Boston Public School system and went on to attend Boston 
     University on one of their Boston Scholars full tuition 
     scholarships. While working full time after graduation, I 
     decided to enroll at the Muscular Therapy Institute in 
     Cambridge with the goal in mind of opening my own business 
     someday. My business partner held down a full time job and 
     attended The Elizabeth Grady School of Aesthetics in 
     preparation for our venture. While for many years we talked 
     about our dream, we know that making that dream become the 
     reality it is today, would not have been possible without 
     programs like the Center for Women & Enterprise and the Small 
     Business Administration.
       For the last 2 years we had been keeping our eyes and ears 
     open about commercial space in Charlestown, which is not easy 
     to come by and generally not affordable. Our goal was to open 
     by May 2004 (when I will turn 30 and my partner will be 31). 
     We hadn't even begun the business plan writing when the ideal 
     location became available in August. The 1,500 square foot 
     commercial space is located at Mishuwam Park Apartments on 
     Maine Street in Charlestown which is an apartment complex 
     funded through the HUD Section 236 program and is managed by 
     Peabody Properties. We had to move quickly on the space and 
     before we knew it we had signed a lease and incorporated in a 
     matter of days. Our target opening date then became November 
     1st which didn't leave us much time to pull things together 
     but we didn't even know how overwhelming the whole process 
     might have been if we had not found the Center for Women & 
     Enterprise.
       After contacting CWE, I received a call back within minutes 
     from Bea Chiem and she would prove to be an invaluable 
     resource to us during the following months. She took what was 
     very complicated and overwhelming for us and made it so much 
     easier to understand. Every time we would come to a part of 
     the financials that we thought we might never figure out, we 
     knew Bea was only a phone call away. I was most impressed by 
     her response time to each and every question I had. Her 
     patience, knowledge and belief in our vision played a major 
     role in us getting the financing we needed. CWE should be 
     proud to have such a caring and knowledgeable woman on the 
     team.
       The closing on our loan with Sovereign finally took place 
     last week and we got a $60,000 term loan and the $40,000 line 
     of credit we requested from Sovereign through an SBA loan. 
     Shannon and I cannot thank the Center for Women & Enterprise 
     enough for all of their help. We have no doubt that without 
     CWE (and Bea) in our corner the financial institutions we 
     approached would not have taken us as seriously.
       The way in which the center for Women & Enterprise reaches 
     out to help women in business inspired us to do the same. In 
     selecting suppliers and inventory for our gift shop within 
     the spa, we chose to carry products that were made by women 
     or by women owned businesses with a preference given to 
     Massachusetts or New England based businesses.
       A Better Place to Be Day Spa, was received well by the 
     Charlestown community, we had 400 people at our grand opening 
     open house on November 1st and have a steady stream of 
     clients coming through our doors each day. And in the short 
     time we have been open we have seen many repeat clients 
     already. Our business got off to a great start because of the 
     Center for Women & Enterprise and as we continue to grow I 
     will be sure to let our clients know that A Better Place to 
     Be Day Spa is here because of the guidance we received from 
     the Center for Women & Enterprise and the support of the 
     Small Business Administration.
       In closing I need you to know that what the Center for 
     Women & Enterprise and the SBA do for women in business is 
     truly incredible. I particularly enjoy the frequent 
     newsletters outlining upcoming events as well as educational 
     opportunities and workshops that I will be sure to take 
     advantage of in the future. A Better Place to Be Day Spa will 
     be represented at the upcoming State House Day and we will 
     continue to look for ways that we can give back to other 
     women in business through CWE.
       Thank you.
                                                  Melanie Marsden,
                                                   Shannon Lawler,
     Owners.
                                  ____

                                           National Association of


                                        Women Business Owners,

                                    Kansas City MO, March 9, 2004.
     Hon. John Kerry,
     Ranking Member, Committee on Small Business and 
         Entrepreneurship.
       Dear Senator Kerry: On behalf of the Kansas City chapter of 
     the National Assoc. of Women Business Owners (representing 
     200 members), I would like to request the following actions 
     be taken regarding the SBA 7(a) program.
       Absent the SBA asking congress for additional funding, 
     NAWBO supports increasing fees on lenders as an approach to 
     adequately fund the SBA 7(a) program and to lift 
     restrictions.
       Specifically, NAWBO would like the program to:
       Allow piggyback loans, but charge a 0.50 percent lender fee 
     for each;
       Raise lender fees by 0.10 percent; and
       For loans that are under $150,000, have lenders pay the SBA 
     the 0.25 percent fee that lenders currently keep for 
     themselves. This only applies to these small loans.
       Thank you.
                                                  Elaine Hamilton,
                                      Public Policy Chair.
     

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