[Congressional Record Volume 155, Number 185 (Thursday, December 10, 2009)]
[Senate]
[Pages S12912-S12913]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. LANDRIEU (for herself and Ms. Snowe):
  S. 2869. A bill to increase loan limits for small business concerns, 
to provide for low interest refinancing for small business concerns, 
and for other purposes.
  Ms. LANDRIEU. Mr. President, our Nation's small businesses have 
created 64 percent of all new jobs in the last 15 years, yet in the 
last year nearly 85 percent of the jobs lost have come from small 
businesses. To reverse this job loss trend and allow small businesses 
to be the engine of economic growth once again, we must make sure they 
have the access to capital they need to be successful and help grow our 
economy.
  That is exactly why I, along with the ranking member of the Small 
Business Committee, Olympia Snowe of Maine, am introducing the Small 
Business Job Creation and Access to Capital Act of 2009. This 
bipartisan legislation is a result of five hearings and roundtables in 
the Small Business Committee this year as well as numerous meetings 
with small business owners. It builds off of S. 1832, the Small 
Business Access to Capital Act of 2009, and S. 1615, the Next Step for 
Main Street Credit Availability Act of 2009, legislation Senator Snowe 
and I have previously introduced.
  This legislation enhances the ability of the SBA to support larger 
loans and provide more options to small businesses. As many other 
sources of capital have evaporated, loans guaranteed by the SBA, with 
support of funding through the Recovery Act, have been able to support 
$16.5 billion in loans to small businesses. Specifically, this act 
would: increase the loan limit on 7(a) loans from $2 million to $5 
million; increase the loan limit on 504 loans from $1.5 million to $5.5 
million; increase the loan limit on microloans from $35,000 to $50,000, 
as well as increase the loan limit to microloan intermediaries from 
$3.5 million to $5 million; allow the 504 loan program to refinance 
short-term commercial real estate debt into long-term, fixed rate 
loans; extend the authorization to provide 90 percent guarantees on 
7(a) loans and fee elimination for borrowers on 7(a) and 504 loans 
through December 31, 2010; and direct the SBA to create a website where 
small businesses can identify lenders in their communities.
  These provisions will have an immediate impact on increasing the 
availability of credit for small businesses and spurring job growth, 
with many of these provisions coming at little or no cost to the 
government. For example, the SBA estimates that the loan limit 
increases will be budget neutral, but will increase SBA lending by $5 
billion next year alone. The refinancing provisions could help save 
60,000 jobs next year by allowing small businesses to refinance short-
term commercial real estate debt into long-term fixed rate mortgages. 
To ensure that this program is budget neutral we have included a 
provision that would require any additional cost created by the program 
to be funded by the fees of the participants. Additionally, we have 
placed a number of safeguards on this program, such as requiring that 
the refinanced loan be current for at least one year, that the business 
owner invest a minimum of 20 percent equity and that the availability 
of funds be capped at $65,000 for every job retained.
  The extension of the 90 percent guarantees on 7(a) loan and the fee 
elimination for borrowers on traditional 504 and 7(a) loans extends 
critical provisions in the Recovery Act. This legislation does not 
include the appropriations for this funding, but does provide an 
extension of its authorization should appropriations be made available. 
It is estimated that if an additional $479 million were to be 
appropriated for these programs, the SBA would be able to support $18.5 
billion in lending to small businesses. Alternately, we are starting to 
see the impact of this funding not being available. In the first full 
week of lending since the SBA had to create a waiting list for the 
final Recovery Act funding, 7(a) loan volume fell from $985 million in 
the last week of the full funding being available, to $71 million. This 
$71 million in loan volume is lower than the average weekly volume we 
were experiencing before the Recovery Act was approved. We also know 
that as of today there are more than 700 small businesses in the SBA 
waiting list approved for $350 million in loans if we made more funding 
available.
  It is clear that now is the time to act. Our Nation's small 
businesses need access to capital and this bill helps facilitate this 
crucial need.
  Ms. SNOWE. Mr. President, we all know the statistics are bleak. 
Unemployment is at 10 percent, more than 7 million Americans have lost 
their jobs since the start of this current recession, and the National 
Federation of Independent Businesses' Optimism Index, a compilation of 
10 survey indicators, is at 88.3, a number the NFIB calls ``stuck at 
recession levels.'' These statistics, and the stories they represent 
present Congress with myriad challenges including: What will we do to 
lower unemployment, create jobs, and help our small businesses to grow 
again?
  The legislation Chair Landrieu and I are introducing today, the Small 
Business Job Creation and Access to Capital Act of 2009, aims to meet 
this challenge and takes the best ideas from Republicans and Democrats, 
to help put American small businesses back to work. I would especially 
like to thank the Chair for working with me in such an open manner in 
developing this bill. Creating jobs and helping small businesses should 
not be a partisan issue and the Chair has been extremely open to my 
suggestions, incorporating many of the provisions I originally 
introduced in the Small Business Lending Improvement Act, the 10 Steps 
for a Main Street Economic Recovery Act, and the Next Step for a Main 
Street Economic Recovery Act into this legislation.
  In the past year, one cornerstone of small business recovery has been 
Small Business Administration, SBA, backed lending. Last year, to help 
address the chronic shortage of capital for small business borrowers, I 
introduced the 10 Steps for a Main Street Economic Recovery Act. Many 
of the provisions in this legislation were included in the American 
Recovery and Reinvestment Act and some have been credited with helping 
to increase SBA loan volume 79 percent.
  One provision which has been extremely popular has been fee 
reductions for 7(a) and 504 loans. In fact, at a round table on 
reauthorizing the SBA's access to capital programs the Senate Committee 
on Small Business and Entrepreneurship heard from Mr. Michael Heath, 
the owner of Ramunto's Brick Oven Pizza in St. Johnsbury, Vermont. Mr. 
Heath told the Committee that the funds he saved in SBA fee reductions 
helped him buy his pizzeria. The bill we are introducing today would 
extend the fee reductions I originally proposed in 10 Steps to December 
31st, 2010. This critical step ensures that we can continue to help 
entrepreneurs like Mike open businesses on Main Streets across America.
  Another vital provision contained in this legislation expands the 
number of

[[Page S12913]]

businesses eligible for SBA-backed loans and expands the size of those 
loans. I originally proposed this idea in the Small Business Lending 
Improvement Act which calls for an alternative size standard that would 
help more small businesses meet the SBA's requirements to access SBA-
backed loans, and also included it in the Next Step for Main Street 
Credit Availability Act, which includes provisions allowing borrowers 
to take out larger 7(a) loans, microloans, and 504 loans. President 
Obama has also recognized the need for larger loan sizes and has 
advocated for this position as a way to create jobs and help small 
businesses.
  Underscoring the inadequate size of SBA loans, I heard testimony 
earlier this year at a field hearing Senator Shaheen and I held in 
Portland, Maine from Mr. Richard Pfeffer, a local business owner, on 
how small SBA loan sizes have directly impacted his business. Mr. 
Pfeffer testified that his two businesses, Aroostook Starch and Gritty 
McDuff's, a restaurant and pub regarded by many as a Portland landmark, 
were close to bankruptcy not because of the economic downturn, but 
rather because of his inability to access larger SBA loans. Mr. Pfeffer 
is still in business today, and Gritty's is now serving its famous 
Christmas Ale, but his inability to access capital still looms and it 
is costing him the opportunity to expand his business and hire more 
workers. The increased loan limits in this bill would help Mr. Pfeffer 
and others like him to put the American economy back on track.
  This bill also includes another provision I proposed in March and 
introduced in my Next Steps legislation that would allow SBA borrowers 
to shop and compare SBA loan rates online, offering borrowers the 
opportunity to make an informed choice and save time and money.
  Finally, the Small Business Job Creation and Access to Capital Act of 
2009 would allow borrowers of 504 loans to refinance their debt. This 
provision will give borrowers critical working capital that they can 
use to grow and expand their businesses.
  These targeted reforms will help put Americans back to work, ease the 
capital crunch for small businesses, and help bring SBA lending into 
the future. I urge my colleagues to support this critical legislation 
to improve America's economy and increase small business lending.

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