[Congressional Record Volume 154, Number 20 (Thursday, February 7, 2008)]
[Senate]
[Pages S793-S794]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KERRY:
  S. 2612. A bill to provide economic stimulus for small business 
concerns; to the Committee on Small Business and Entrepreneurship.
  Mr. KERRY. Mr. President, data from the Federal Reserve Bank and the

[[Page S794]]

Small Business Administration show that the home mortgage crisis is 
spreading, making it harder and more expensive for small businesses to 
get loans. Specifically, according to the Federal Reserve's survey, 
more than 30 percent of domestic banks indicated that they have 
tightened their credit standards for commercial and industrial loans to 
small businesses over the past three months. That same survey also 
found that 80 percent of the domestic banks reported tighter lending 
standards for commercial real estate loans--the highest percentage 
recorded since the Fed began posing the question 18 years ago.
  While that information is troubling, it is not a surprise. So far 
this fiscal year, the number of loans made through the SBA's largest 
lending program, the 7(a) loan guaranty program, dropped 14 percent 
compared with the same period last year, and dollar volume fell six 
percent. Lending in SBA's 504 loan program, after growing steadily over 
the last few years, and being up even three months ago, has gone flat. 
These figures are alarming because, historically, SBA loan activity has 
increased when the conventional credit market has tightened and their 
absence or smaller role in financing is a problem. Why? These two loan 
programs--the 7(a) Loan Guaranty program and the 504 Loan Guaranty 
program--are the largest source of long-term capital to small 
businesses in this country. They play an essential role in the 
continuum of financing to our small businesses.
  As we talked to lenders and SBA to try and understand what was 
causing this trend, we identified several changes we could make to 
SBA's lending programs to try and stimulate the economy. What could we 
do to get lenders to start lending again, and how could we make it more 
affordable for small businesses? The bill I am introducing today--the 
Small Business Lending Stimulus Act of 2008--incorporates those 
findings. We made the changes temporary, targeted, and timely. We have 
evidence that these changes work, because we did something similar, in 
a bipartisan way, after the terrorist attacks of 9-11, and it 
stimulated the economy and mitigated job loss and business closures by 
pumping almost $3 billion into our local economies.
  Unfortunately, there is no magic bullet to right the economy, but we 
need to use every tool at our disposal to mitigate further problems for 
our economy. The SBA's programs are one effective tool. I hope that my 
colleagues can get behind this legislation.

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