[Congressional Record Volume 151, Number 71 (Wednesday, May 25, 2005)]
[Extensions of Remarks]
[Page E1088]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     SMALL BUSINESS INTERMEDIARY LENDING PILOT PROGRAM ACT OF 2005

                                 ______
                                 

                           HON. BOBBY L. RUSH

                              of illinois

                    in the house of representatives

                        Wednesday, May 25, 2005

  Mr. RUSH. Mr. Speaker, I rise today to introduce the ``Small Business 
Intermediary Lending Pilot Program Act of 2005'' (SBILPP). This bill 
would establish a pilot program to provide low interest loans to 
nonprofit, community-based lending intermediaries. The program would 
also provide midsize loans for small businesses.
  Small businesses and startups continue to face barriers when 
accessing midsize loans between $35,000 and $200,000, with affordable 
terms and conditions. With all of the banking industry consolidation, 
the method by which banks make small business credit decisions has 
changed to the disadvantage of small or startup businesses. Nonprofit 
intermediary lenders, including community development corporations, are 
in a better position to provide financial support to small businesses.
  These nonprofit intermediary lenders provide riskier, up front 
capital to small businesses, with more flexible terms and underwriting 
procedures. These lenders also offer technical assistance to reduce the 
transaction costs and risk exposure of banks. The effectiveness of 
these types of programs has been demonstrated by several Federal 
programs, including the Microloan Program under the Small Business Act, 
and the Intermediary Relending Program in the Department of 
Agriculture. There are more than 1,000 nonprofit intermediaries around 
the country that are addressing the needs of small businesses by 
providing financial and technical assistance, leveraging additional 
capital for borrowers, and creating employment opportunities for low 
income individuals through their lending and business development 
activities.
  This bill would establish a midsize loan pilot program, providing 
loans averaging $150,000 to eligible intermediaries, particularly for 
startup, newly established, or growing small businesses. The bill would 
also assess the effectiveness of nonprofit intermediaries, and 
determine the feasibility of implementing a midsize loan program 
nationwide.
  I hope my colleagues will join me to support this initiative.

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