[Congressional Record Volume 155, Number 154 (Thursday, October 22, 2009)]
[Senate]
[Pages S10695-S10696]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         INCREASING LOAN LIMITS

  Ms. LANDRIEU. Mr. President, since Congress passed and the President 
signed the American Recovery and Reinvestment Act in February, more 
than 33,000 loans--nearly $13 billion--have gotten into the hands of 
entrepreneurs, helping to give more small businesses the capital they 
need to stock their shelves and pay their employees while creating or 
saving 325,000 jobs at a critical time. But as President Obama said 
yesterday, we must do everything in our power to help our nation's 
innovators and job creators to ensure their success and our nation's 
economy and future competitiveness.
  Ensuring that small businesses have greater access to capital is the 
first, and perhaps most critical, step. In hearings, roundtables and 
other meetings with small business owners and lenders, I have heard 
time and time again that the current small business loan limits do not 
adequately meet their needs. To answer their urgent call for help, I am 
here today to introduce S. 1832, The Small Business Access to Capital 
Act of 2009. Senate

[[Page S10696]]

Small Business Committee and Entrepreneurship members Senators John 
Kerry of Massachusetts, Tom Harkin of Iowa, Ben Cardin of Maryland and 
Jeanne Shaheen of New Hampshire, along with Senators Barbara Boxer of 
California and Bob Casey of Pennsylvania, have joined me as cosponsors 
of this bill.
  The Small Business Access to Capital Act of 2009 contains several of 
the initiatives President Obama highlighted in his speech yesterday, 
including raising the limits on SBA loans to as high as $5.5 million. 
Coupled with lower-cost capital available to community lenders, these 
higher loan limits will further spur small business growth and aid in 
our nation's continued economic recovery.
  I have made increasing access to capital for small businesses a top 
priority within my Committee since the day I became Chair, leading my 
first Committee event on this topic in January. Since that first 
roundtable, Senator Snowe and I helped pass the Recovery Act's small 
business provisions that eliminated SBA loan fees for borrowers to make 
capital more affordable, increased the loan guarantees on SBA's largest 
loan program to reduce risk for banks and encourage them to lend when 
the economy was at its worst, and created initiatives to help unfreeze 
the secondary market for SBA loans so that banks would have more 
capital to lend small businesses. These provisions, as I mentioned 
earlier, helped some 33,000 businesses receive $13 billion in capital, 
saving or creating 325,000 jobs.
  I have also held four additional hearings and roundtables focused on 
increasing access to capital for entrepreneurs. Most recently, an 
oversight hearing on October 6 focused on what in the Recovery Act has 
been implemented and what additional steps Congress needs to take. 
Increasing loan limits was a main focus.
  In addition to making greater access to capital a top priority since 
and prior to my becoming Chair, I have specifically supported 
increasing the loan limits for the past two Congresses, voting 
favorably for this increase in the last two SBA reauthorization bills 
out of the Senate Small Business Committee. My bill goes above and 
beyond these increases because in this recession small business needs 
are greater than ever before, and the programs have not been updated in 
many years.
  The bill I am introducing today increases the maximum 7(a) loan from 
$2 million to $5 million, increases the maximum 504 loan from $1.5 
million to $5.5 million, and the maximum microloan from $35,000 to 
$50,000. These are all provisions that have been championed by my 
colleague and Ranking Member, Olympia Snowe, in S.1615, the Next Steps 
for Main Street Act. Additionally, the bill includes a provision to 
allow businesses to use 504 loan guarantees to refinance existing 
business debt and allows microloan intermediaries to have greater 
access to technical assistance grants. The bill also increases the 
amount that a New Market Venture Capital Company can invest in any one 
company, helping fast-growing businesses located in areas with chronic 
underemployment.
  The Recovery Act included a controversial provision that exempts the 
National Institutes of Science (NIH) from participating in the Small 
Business Innovation Research (SBIR) and the Small Business Technology 
Transfer (STTR) programs. This provision could cost small businesses as 
much as $230 million in lost r&d work, impacting the development of 
needed military and medical technologies and therapies. In addition, it 
directly counters the goals of the Recovery Act to create high-paying 
jobs, spur innovation and boost America's competitiveness. This bill 
contains a provision to correct this unfair exemption by requiring NIH 
to obligate $150 million of the Recovery funds it received to be used 
for SBIR and STTR projects.
  Last, the bill amends the America's Recovery Capital (ARC) loan 
program, enacted as part of the Recovery Act, so that businesses with 
existing SBA 7(a) loans can access this financing. The temporary ARC 
program offers interest-free loans to viable small businesses, which 
carry a 100-percent guaranty from the SBA to the lender and require no 
fees paid to SBA. Loan proceeds are provided over a six-month period 
and repayment of the ARC loan principal is deferred for 12 months after 
the last disbursement of the proceeds. Repayment can extend up to five 
years.
  With small businesses making up the largest source of employment in 
this country, and the national unemployment rate still too high, 
changes like these are vital to the success of our small businesses and 
the competitiveness of our nation. I look forward to working with 
President Obama and his Administration, Ranking Member Snowe and my 
Senate and House colleagues to quickly pass this critical legislation 
and send to the President for signature.

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