[Congressional Record Volume 150, Number 43 (Wednesday, March 31, 2004)]
[House]
[Pages H1746-H1750]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TEMPORARY EXTENSION OF PROGRAMS UNDER THE SMALL BUSINESS ACT AND THE
SMALL BUSINESS INVESTMENT ACT OF 1958
Mr. MANZULLO. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 4062) to provide for an additional temporary extension of
programs under the Small Business Act and the Small Business Investment
Act of 1958 through June 4, 2004, and for other purposes.
The Clerk read as follows:
H.R. 4062
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. ADDITIONAL TEMPORARY EXTENSION OF AUTHORIZATION OF
PROGRAMS UNDER SMALL BUSINESS ACT AND SMALL
BUSINESS INVESTMENT ACT OF 1958.
The authorization for any program, authority, or provision,
including any pilot program, that was extended through April
2, 2004, by section 1 of Public Law 108-205 is further
extended through June 4, 2004, under the same terms and
conditions.
SEC. 2. EXTENSION OF CERTAIN FEE AUTHORIZATIONS.
Section 503(f) of the Small Business Investment Act of 1958
(15 U.S.C. 697 (f)), as amended by section 2 of Public Law
108-205, is further amended by striking ``May 21, 2004'' and
inserting ``October 1, 2004''.
SEC. 3. FISCAL YEAR 2004 PURCHASE AND GUARANTEE AUTHORITY
UNDER TITLE III OF SMALL BUSINESS INVESTMENT
ACT OF 1958.
Section 20 of the Small Business Act (15 U.S.C. 631 note)
is amended by adding at the end the following new subsection:
``(j) Fiscal Year 2004 Purchase and Guarantee Authority
Under Title III of Small Business Investment Act of 1958.--
For fiscal year 2004, for the programs authorized by title
III of the Small Business Investment Act of 1958 (15 U.S.C.
681 et seq.), the Administration is authorized to make--
``(1) $4,000,000,000 in purchases of participating
securities; and
``(2) $3,000,000,000 in guarantees of debentures.''.
SEC. 4. COMBINATION FINANCING.
(a) In General.--During the period beginning on the date of
the enactment of this section and ending on September 30,
2004, subsection (a) of section 7 of the Small Business Act
(15 U.S.C. 636(a)) shall be applied as if the paragraph set
forth in subsection (b) were added at the end of that
subsection (a).
(b) Paragraph Specified.--The paragraph referred to in
subsection (a) is as follows:
``(31) Combination financing.--
``(A) Definitions.--In this paragraph--
``(i) the term `combination financing' means financing
comprised of a loan guaranteed under this subsection and a
commercial loan; and
``(ii) the term `commercial loan' means a loan which is
part of a combination financing and no portion of which is
guaranteed by the Federal Government.
``(B) Applicability.--This paragraph applies to a loan
guarantee obtained by a small business concern under this
subsection, if the small business concern also obtains a
commercial loan.
``(C) Commercial loan amount.--In the case of any
combination financing, the amount of the commercial loan
which is part of such financing shall not exceed the gross
amount of the loan guaranteed under this subsection which is
part of such financing.
``(D) Commercial loan provisions.--The commercial loan
obtained by the small business concern--
``(i) may be made by the participating lender that is
providing financing under this subsection or by a different
lender;
``(ii) may be secured by a senior lien; and
``(iii) may be made by a lender in the Preferred Lenders
Program, if applicable.
``(E) Commercial loan fee.--A one-time fee in an amount
equal to 0.7 percent of the amount of the commercial loan
shall be paid by the lender to the Administration if the
commercial loan has a senior credit position to that of the
loan guaranteed under this subsection. Paragraph (23)(B)
shall apply to the fee established by this paragraph.
``(F) Deferred participation loan security.--A loan
guaranteed under this subsection may be secured by a
subordinated lien.
[[Page H1747]]
``(G) Completion of application processing.--The
Administrator shall complete processing of an application for
combination financing under this paragraph pursuant to the
program authorized by this subsection as it was operating on
October 1, 2003.
``(H) Business loan eligibility.--Any standards prescribed
by the Administrator relating to the eligibility of small
business concerns to obtain combination financing under this
subsection which are in effect on the date of the enactment
of this paragraph shall apply with respect to combination
financings made under this paragraph. Any modifications to
such standards by the Administrator after such date shall not
unreasonably restrict the availability of combination
financing under this paragraph relative to the availability
of such financing before such modifications.''.
SEC. 5. LOAN GUARANTEE FEES.
(a) In General.--During the period beginning on the date of
the enactment of this section and ending on September 30,
2004, subparagraph (A) of paragraph (23) of subsection (a) of
section 7 of the Small Business Act (15 U.S.C. 636(a)(23)(A))
shall be applied as if that subparagraph consisted of the
language set forth in subsection (b).
(b) Language Specified.--The language referred to in
subsection (a) is as follows:
``(A) Percentage.--
``(i) In general.--With respect to each loan guaranteed
under this subsection, the Administrator shall, in accordance
with such terms and procedures as the Administrator shall
establish by regulation, assess and collect an annual fee in
an amount equal to 0.5 percent of the outstanding balance of
the deferred participation share of the loan.
``(ii) Temporary percentage.--With respect to loans
approved during the period beginning on the date of enactment
of this clause and ending on September 30, 2004, the annual
fee assessed and collected under clause (i) shall be equal to
0.36 percent of the outstanding balance of the deferred
participation share of the loan.''.
(c) Retention of Certain Fees.--Subparagraph (B) of
paragraph (18) of subsection (a) of section 7 of the Small
Business Act (15 U.S.C. 636(a)(18)(B)) shall not be effective
during the period beginning on the date of the enactment of
this section and ending on September 30, 2004.
SEC. 6. EXPRESS LOAN PROVISIONS.
(a) Definitions.--For the purposes of this section:
(1) The term ``express lender'' shall mean any lender
authorized by the Administrator to participate in the Express
Loan Pilot Program.
(2) The term ``Express Loan'' shall mean any loan made
pursuant to section 7(a) of the Small Business Act (15 U.S.C.
636(a)) in which a lender utilizes to the maximum extent
practicable its own loan analyses, procedures, and
documentation.
(3) The term ``Express Loan Pilot Program'' shall mean the
program established by the Administrator prior to the date of
enactment of this section under the authority granted in
section 7(a)(25)(B) of the Small Business Act (15 U.S.C.
636(a)(25(B)) with a guaranty rate not to exceed 50 percent.
(4) The term ``Administrator'' means the Administrator of
the Small Business Administration.
(5) The term ``small business concern'' has the same
meaning given such term under section 3(a) of the Small
Business Act (15 U.S.C. 632(a)).
(b) Restriction to Express Lender.--The authority to make
an Express Loan shall be limited to those lenders deemed
qualified to make such loans by the Administrator.
Designation as an express lender for purposes of making an
Express Loan shall not prohibit such lender from taking any
other action authorized by the Administrator for that lender
pursuant to section 7(a) of the Small Business Act (15 U.S.C.
636(a)).
(c) Grandfathering of Existing Lenders.--Any express lender
shall retain such designation unless the Administrator
determines that the express lender has violated the law or
regulations promulgated by the Administrator or modifies the
requirements to be an express lender and the lender no longer
satisfies those requirements.
(d) Temporary Expansion of Express Loan Pilot Program.--
(1) Authorization.--As of the date of enactment of this
section, the maximum loan amount in the Express Loan Pilot
Program shall be increased to a maximum loan amount of
$2,000,000 as set forth in section 7(a)(3)(A) of the Small
Business Act (15 U.S.C. 636(a)(3)(A)).
(2) Termination date.--The authority set forth in paragraph
(1) shall terminate on September 30, 2004.
(3) Savings provision.--Nothing in this section shall be
interpreted to modify or alter the authority of the
Administrator to continue to operate the Express Loan Pilot
Program on or after October 1, 2004.
(e) Option to Participate.--Except as otherwise provided in
this section, the Administrator shall take no regulatory,
policy, or administrative action, without regard to whether
such action requires notification pursuant to section
7(a)(24) of the Small Business Act (15 U.S.C. 636(a)(24)),
that has the effect of--
(1) requiring a lender to make an Express Loan pursuant to
subsection (d);
(2) limiting or modifying any term or condition of deferred
participation loans made under such section (other than
Express Loans) unless the Administrator imposes the same
limit or modification on Express Loans;
(3) transferring or re-allocating staff, staff
responsibilities, resources, or funding, if the result of
such transfer or re-allocation would be to increase the
average loan processing, approval, or disbursement time above
the averages for those functions as of October 1, 2003, for
loan guarantees approved under such section by employees of
the Administration or through the Preferred Lenders Program;
or
(4) otherwise providing any incentive or disincentive which
encourages lenders or borrowers to make or obtain loans under
the Express Loan Pilot Program instead of under the general
loan authority of section 7(a) of the Small Business Act (15
U.S.C. 636(a)).
(f) Collection and Reporting of Data.--For all loans in
excess of $250,000 made pursuant to the authority set forth
in subsection (d)(1), the Administrator shall, to the extent
practicable, collect data on the purpose for each such loan.
The Administrator shall report monthly to the Committee on
Small Business and Entrepreneurship of the Senate and the
Committee on Small Business of the House of Representatives
on the number of such loans and their purposes.
(g) Termination.--Subsections (b), (c), (e), and (f) shall
not apply after September 30, 2004.
SEC. 7. FISCAL YEAR 2004 DEFERRED PARTICIPATION STANDARDS.
Deferred participation loans made during the period
beginning on the date of the enactment of this Act and ending
on September 30, 2004, under section 7(a) of the Small
Business Act (15 U.S.C. 636(a)) shall have the same terms and
conditions (including maximum gross loan amounts and
collateral requirements) as were applicable to loans made
under such section on October 1, 2003, except as otherwise
provided in this Act. This section shall not preclude the
Administrator of the Small Business Administration from
taking such action as necessary to maintain the loan program
carried out under such section, subject to appropriations.
SEC. 8. TEMPORARY INCREASE IN LOAN LIMIT UNDER BUSINESS LOAN
AND INVESTMENT FUND AND IN ASSOCIATED GUARANTEE
FEES.
(a) Temporary Increase in Amount Permitted To Be
Outstanding and Committed.--During the period beginning on
the date of the enactment of this Act and ending on September
30, 2004, section 7(a)(3)(A) of the Small Business Act (15
U.S.C. 636(a)(3)(A)) shall be applied as if the first dollar
figure were $1,500,000.
(b) Temporary Guarantee Fee on Deferred Participation Share
Over $1,000,000.--With respect to loans made during the
period referred to in subsection (a) to which section
7(a)(18) of the Small Business Act (15 U.S.C. 636(a)(18))
applies, the Administrator of the Small Business
Administration shall collect an additional guarantee fee
equal to 0.25 percent of the amount (if any) by which the
deferred participation share of the loan exceeds $1,000,000.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Illinois (Mr. Manzullo) and the gentlewoman from New York (Ms.
Velazquez) each will control 20 minutes.
The Chair recognizes the gentleman from Illinois (Mr. Manzullo).
General Leave
Mr. MANZULLO. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks and include extraneous material on this legislation.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Illinois?
There was no objection.
Mr. MANZULLO. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, this bill is a bipartisan work product between the
gentlewoman from New York (Ms. Velazquez) and me and is a result of the
commitment made on the House floor earlier this month to provide a fix
to the problem in the main flagship guaranteed lending program of the
Small Business Administration.
This legislation would not only restore the overall 7(a) program to
full strength, but also expand its outreach to help more small
businesses grow and create more jobs.
Earlier this year, a funding shortfall unfortunately required the SBA
to temporarily suspend the program for a week, reduce the maximum loan
size to $750,000, and prohibit combination or piggyback loans.
In this compromise, the annual lender ongoing fee on 7(a) loans would
increase from 0.25 percent to 0.36 percent. The lender would also pay a
0.70 percent up-front fee for combination or piggyback loans. For loans
under $150,000, the lender would no longer be allowed to retain the
0.25 percent ongoing fee. Instead, this bill, under the provisions in
it, the SBA will keep that fee.
[[Page H1748]]
H.R. 4062 raises the 7(a) guaranteed limit from $1 million to $1.5
million with an additional risk premium fee of 0.25 percent imposed on
the borrower over and above the 3.5 percent fee they currently pay on
loan amounts over $1 million.
Finally, H.R. 4062 allows lenders the option to make loans up to $2
million under the SBA Express program, which has a 50 percent guarantee
rate; but banks can use their own paperwork. Currently lenders can only
make loans up to $250,000 under the SBA Express program. I want to make
it clear, however, that I intend that this provision must be truly
optional on the part of the lenders. The SBA should not do anything in
its internal policies or procedures that tilts this rule in favor of
SBA Express at the expense of the rest of the 7(a) lending program.
All together, these provisions will provide an additional $3 billion
in lending to small businesses for the rest of fiscal year 2004 to
reach a total of 7(a) program level of $12.55 billion without requiring
any additional appropriations or reprogramming funds from other key
areas within the SBA.
When this bill is passed by Congress and signed into law, SBA assures
me it will provide enough lending authority for the SBA to remove the
current loan cap of $750,000 and also allow combination or piggyback
loans.
By increasing the 7(a) programs lending authority, SBA estimates that
through their lending partners they will be able to offer 30,000
additional guaranteed loans, which could create or retain as many as a
half million jobs by the end of September.
In addition to fixing the 7(a) program, the bill authorizes the SBA
to charge fees under the 504 Certified Development Company program and
the Small Business Investment Company program until the end of the
fiscal year or September 30, 2004. Both these programs operate solely
on the basis of user fees and do not require an annual appropriation.
Currently, the authority to charge these fees expires on May 21.
Finally, the general extension of SBA programs not covered by an
appropriation such as the surety bond program, SBA's cosponsorship
authority, and several very small procurement assistance programs, will
move from the current deadline of April 2 to June 4 of 2004.
This bipartisan bill has the support of both the minority and
majority sides of the Committee on Small Business. It has the support
of the administration. And finally, it represents the consensus
position of those who use the 7(a) program, both borrowers and lenders.
I urge my colleagues to support H.R. 4062.
Mr. Speaker, I reserve the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may
consume.
(Ms. VELAZQUEZ asked and was given permission to revise and extend
her remarks.)
Ms. VELAZQUEZ. Mr. Speaker, first I would like to thank the chairman
and the House leadership for their commitment and willingness to
resolve this program in a bipartisan manner.
In today's jobless recovery, small businesses are more important than
ever. That is because small businesses are this country's main economic
driver. They are this country's main job creator, and they are this
country's number one employer. They are the backbone of the American
economy.
One big challenge for small businesses is access to capital. Studies
have shown that too many entrepreneurs finance their great ideas with
credit cards. And this puts them into debt even before they get their
businesses off the ground.
{time} 1030
That is exactly why the SBA loan programs are so critical. These
programs fill a financing gap for small firms, making loans on great
ideas that may not have been looked at twice or invested in it at all.
In fact, last year, the SBA's 7(a) flagship loan program provided
hundreds of thousands of small businesses with billions of dollars that
was then pumped back into the U.S. economy.
Yet, for all the good the 7(a) program has done, it recently fell on
tough times. The program was shut down at the end of last year and was
later reopened but with severe restrictions in place. Just after the
program hit these bad times, so did the small business owners that were
trying to secure loans. Suddenly, their plans to hire employees, expand
their operations or purchase new equipment were put on hold; and, as a
result, job creation was put on hold for the American economy overall.
I am happy to say to all those small business owners out there who
have suffered, we are going to make the 7(a) loan program whole again
with the bill before us today. This program that has helped countless
entrepreneurs turn their dreams of business ownership into reality is
back, and hopefully it is here to stay.
In H.R. 4062, we ask lenders to shoulder greater responsibility for
the program, but we are also giving them a new tool by raising the
guarantee rate from $1 million to $1.5 million. In doing this, lenders
will be able to guarantee more loans, more money will flow into the
American economy, and small firms will be able to create more jobs.
This fix will support our small businesses that create good-paying
jobs right here in the United States, unlike the large multinational
corporations that move jobs overseas in search of cheap labor and lax
environmental standards without even thinking twice.
Our solution will especially help small manufacturers who have been
hard hit, like Elliot Moses, a small businessman from Sandy, Utah, who
was left on the edge of financial ruin when the 7(a) program was
closed. Now he and thousands of other manufacturers can get the loans
they need to stay competitive, strengthen their operations here in the
U.S. and hire more American workers.
With H.R. 4062, we pave the way to success for manufacturers and
small businesses everywhere. With this bill, we make sure small
businesses have access to capital. With this bill, we make sure small
businesses can invest in their ventures, purchase new equipment, expand
and create jobs. With this bill, we will be giving our economy the shot
in the arm that it needs right now; and with this bill, we also give
new hope to the 8.2 million unemployed Americans that something is
being done to transform the current jobless environment into one of
work and prosperity.
If my colleagues support our Nation's economy, if they support job
creation, then I urge my colleagues to support H.R. 4062.
Mr. Speaker, I reserve the balance of my time.
Mr. MANZULLO. Mr. Speaker, I have no further speakers. I would ask
the gentlewoman if she has any further speakers
Ms. VELAZQUEZ. Mr. Speaker, I do not have any other speakers
Mr. MANZULLO. Mr. Speaker, I yield back the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may
consume.
By passing this bill, we will show small businesses just how
important they are to the U.S. economy. We will show them that we want
to make it easier for them to invest capital back into the businesses
where it belongs; and, Mr. Speaker, I would like to take a moment to
thank all the staff who worked hard on this solution.
I would like to thank from the administration, the staff, Jenny
Mayne, Anthony Bedell and Charles Rowe. From the House leadership, I
would like to thank KiKi Kless and Julie Sullivan. From the chairman's
office, Barry Pineles, Matthew Szymanski and Phil Eskeland. From the
Democratic Committee on Small Business staff, I would like to thank the
staff director Michael Day, Adam Minehardt and Jordan Haas.
Mr. Speaker, I yield as much time as she may consume to the
gentlewoman from California (Ms. Millender-McDonald).
Ms. MILLENDER-McDONALD. Mr. Speaker, I would like to thank the
chairman and the ranking member for their leadership. They have fought
long and hard to make sure that they heard the cry of small businesses.
Small businesses have been crying throughout this country, saying
that they needed the 7(a) loan programs so that they can do business;
and we all recognize that small businesses are the engine that creates
the jobs in this country. So to the gentleman from Illinois (Chairman
Manzullo) and the gentlewoman from New York (Ranking
[[Page H1749]]
Member Velazquez), I thank them so much for bringing this to the floor
and all of the staff members who have worked so hard.
Mr. Speaker, this critical measure will help reopen the Small
Business Administration's core lending vehicle which is the 7(a) loan
program, and it will provide funding for the agency through June 4.
While we grapple with the budget, we recognize that there are
shortcomings in terms of it, but at least it will begin to address
those applications that have come to us from those small businesses
that critically need the financing through the 7(a) loan program.
This bill also makes a number of important changes to the program,
including lifting the $750,000 cap on loans and gets the program
running at an adequate level. It removes the regulatory restriction,
also known as the ``piggybacking,'' on SBA loans being part of larger
financing packages.
This bill also creates a new financing tool by increasing the size of
the loan guarantee to $1.5 million, which provides more options for
lenders providing these loans.
Finally, Mr. Speaker, this bill extends the 504 loan program and the
SBIC program through the end of this year.
We cannot thank the ranking member and the chair enough for the hard
work that they have done, because these are important loan programs for
small businesses.
As the ranking member on the Subcommittee on Tax, Finance, and
Exports, I have long understood the critical role this program plays in
keeping our Nation's economy vibrant and strong. These loans are the
only source of affordable, long-term financing for many of our Nation's
small businesses, and loans spur economic development in underserved
areas.
In addition, the 7(a) loan program can be used for long-term working
capital, including accounts payable, just allowing small businesses to
do business.
Mr. Speaker, I urge all of my colleagues to pass this very important
piece of legislation, H.R. 4062.
Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may
consume.
I urge the adoption of H.R. 4062 and call on the Senate to act
quickly on this measure so that small businesses across the country can
benefit.
Mr. BACA. Mr. Speaker, I rise in support of American small businesses
and the 7(a) loan program.
President Bush has stood by while a record 2.9 million private sector
jobs disappeared. The overall unemployment rate has stalled at 5.6
percent. It would be even higher if it included 1.7 million Americans
who are no longer searching for employment.
As a former small business owner, I know the benefits they provide to
our economy. Small businesses generate three-fourths of all new jobs.
They represent 99 percent of all employers and create more than half of
our GDP. If we want our economy to grow, we need to support small
businesses.
But that's not what the Administration has done. At every step they
have cut programs and decreased funds. The Administration's FY2005
budget devastates small businesses. 22 programs will be terminated and
14 will see their budgets cut.
The microloan program, which provides small businesses with loans of
up to $35,000, will be terminated, while the Manufacturing Extension
Program, which helps small manufacturers solve business problems, has
been cut by $66 million over the last two years. The 7(a) loan program
has been repeatedly cut and dismantled. They've done everything they
could think of in order to kill it. They reorganized it. They closed it
down. They capped the loans.
If the 7(a) program is shut down or the amount of loans is capped,
then small businesses will suffer. They will not have access to
affordable capital. And they will be forced to lay off workers and shut
their doors. It is so important for small business to have affordable
access to capital. That is why I commend the Democrats on the Small
Business Committee for working so hard to save the 7(a) loan program.
But the Administration still doesn't get it. They continually cut the
programs and the funds that support our small businesses. To stop our
Nation's march towards a jobless recovery, our small businesses must be
taken care of. Unless the Administration recognizes the problems that
face American small businesses, the unemployment rate will rise and our
economy will not recover.
Mr. SHUSTER. Mr. Speaker, I rise today in strong support of H.R.
4062, which would temporarily extend the Small Business
Administration's 7(a) loan program. One of the SBA's most successful
initiatives, the 7(A) loan program provides loan guarantees to small
businesses. These small businesses are able to use this financial
assistance to start up new enterprises. In January 2004, due to lack of
funding, the SBA was forced to temporarily suspend the 7(a) loan
program, thus cutting off a major funding resource for thousands of
potential new small businesses. While the SBA was able to have the
program up and running again in a relatively short time, it was still
forced to scale back on the size and scope of the 7(a) program.
I am pleased that the legislation before us today not only extends
the 7(a) program, but also restores the robust nature of the program by
reinstating the maximum loan amount to $2 million. Additionally, H.R.
4026 would allow for piggyback loans, allowing businesses to seek out
additional financial assistance to help grow their business. Equally
important for our Nation's lenders, H.R. 4062, would increase the loan
guarantee to $1.5 million. Lastly, Mr. Speaker, plans put forth this
morning will create at least $12.5 billion in lending authority for the
SBA in Fiscal Year 2004 and will allow for SBA to add an additional
30,000 loans which in turn could create thousands of new jobs.
In conclusion, I want to extend my thanks to our Chairman Don
Manzullo and Ranking Member Nydia Velazquez for their hard work and
leadership on this issue. Today's action will allow the SBA to continue
providing financial assistance to our Nation's small businesses and
keep our economy growing. I urge my colleagues to support this measure.
Ms. BORDALLO. Mr. Speaker, I rise today in strong support of H.R.
4062, which will temporarily resolve the funding shortage for the Small
Business Administration's 7(a) Loan Guarantee Program and ease the
resulting financial burden that has been placed on small businesses.
H.R. 4062 is the product of bi-partisan collaboration, and I commend
Chairman Manzullo and Ranking Member Velazquez for working together to
create a sound public policy response to this crisis for small
businesses. I also thank the House Leadership on both sides of the
aisle for responding promptly and positively.
The 7(a) Loan Guarantee Program is the Small Business
Administration's flagship financing program, which accounts for 30
percent of all small business long-term loans in this country.
On February 11th of this year, the Small Business Committee held a
hearing on the Administration's proposed Fiscal Year 2005 Budget for
the Small Business Administration. At that hearing, small business
owners from a diverse array of geographical areas and engaged in a
variety of different industries testified that the financial crisis at
the SBA 7(a) Loan Guarantee Program caused them undue hardship. Most
indicated that the failure to access 7(a) Loans on more reasonable
terms would preclude their respective companies from gaining access to
the capital necessary to ensure survival. In the case of one small
business owner who testified about his company's proposed project, the
mayor of the city in which the company's site would be built
accompanied him to Washington. The mayor spelled out exactly what was
at stake for his economically distressed community; the opportunity to
revive the local economy and provide new jobs, or the prospect of
further decay and desperation.
H.R. 4062 lifts temporary caps on 7(a) loans that were instituted in
order to respond to its financial crisis. It will again allow for 7(a)
loans to be included in larger financial packages, and provide working
capital for export activities of small businesses. This is a step in
the right direction, and I hope that Congress will follow the model of
H.R. 4062 in addressing the long-term health of a 7(a) program that is
so important to small businesses, which are incubators of economic and
job growth in our communities.
I urge my colleagues to support H.R. 4062.
Ms. WOOLSEY. Mr. Speaker, I rise today in support of H.R. 4062, and I
am pleased that this legislation reopens the 7(a) loan program and
ensures that small businesses will once again be able to benefit from
its lending power.
As a former small business owner, I understand the frustrations and
worries small business owners have had as this program has sat in
limbo. Small businesses are one of our Nation's leading employment
opportunities, but few businesses can afford to start up of expand
without the help of loans.
Renewing our commitment to the Small Business Administration 7(a)
loan program will not only bolster our Nation's workforce but also the
economy as a whole.
Mr. Speaker, I want to urge all my colleagues to join me in
supporting this vital piece of legislation.
Mr. PRICE of North Carolina. Mr. Speaker, I would like to
congratulate my colleagues on the Small Business Committee for their
bipartisan effort, which allowed this bill to be voted
[[Page H1750]]
on just in the nick of time. I would like to especially congratulate
Congresswoman Velazquez, who has worked tirelessly to bring about this
victory for small business.
H.R. 4062 restores the 7(a) program to its former strength by lifting
the caps on 7(a) loans. It also takes the important step of removing
regulatory limitations that had prevented SBA loans from being a part
of larger financing packages.
7(a) loans account for nearly 30 percent of all long-term loans for
small businesses in America, businesses that are the number one job
creators in this country. So it is essential that we get this program
back up and running again. This bill would do that, and it would also
extend the important 504 loan program and SBIC programs through the end
of this year.
The next step is to make sure that these authorized programs in SBA
are fully funded. The President's budget provided zero funding for 7(a)
and a number of other important SBA programs. Furthermore, it is
important that we put safeguards in place to prevent last-minute
shutdowns like those we experienced this past January.
I am working with my colleagues to restore 7(a) funds and to ensure
that in the future there are not caps or program shutdowns that deny
small businesses access to critically needed resources.
This is the vital next step to the authorization we are passing
today, and I urge my colleagues to make certain that we provide the
resources to make good on the commitment this bill makes to small
businesses.
Ms. VELAZQUEZ. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. LaHood). The question is on the motion
offered by the gentleman from Illinois (Mr. Manzullo) that the House
suspend the rules and pass the bill, H.R. 4062.
The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
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