[Congressional Record Volume 156, Number 48 (Thursday, March 25, 2010)]
[House]
[Pages H2414-H2416]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
EXTENDING THE SMALL BUSINESS LOAN GUARANTEE PROGRAM
Mr. SERRANO. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 4938) to permit the use of previously appropriated funds to
extend the Small Business Loan Guarantee Program, and for other
purposes.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 4938
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. EXTENSION OF SMALL BUSINESS LOAN GUARANTEE
PROGRAM.
(a) Authority To Use Funds.--Up to $40,000,000 of the
amount made available under the heading ``Small Business
Administration--Business Loans Program Account'' in title V
of division C of the Consolidated Appropriations Act, 2010
(Public Law 111-117) also may be utilized for fee reductions
and eliminations under section 501 of title V of division A
of the American Recovery and Reinvestment Act of 2009 (Public
Law 111-5) and for the cost of guaranteed loans under
[[Page H2415]]
section 502 of such title. Such costs, including the cost of
modifying such loans, shall be as defined in section 502 of
the Congressional Budget Act of 1974.
(b) Extension of Sunset Date.--Section 502(f) of title V of
division A of the American Recovery and Reinvestment Act of
2009 (Public Law 111-5) is amended by striking ``March 28,
2010'' and inserting ``April 30, 2010''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New
York (Mr. Serrano) and the gentlewoman from Missouri (Mrs. Emerson)
each will control 20 minutes.
The Chair recognizes the gentleman from New York.
{time} 1645
General Leave
Mr. SERRANO. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days to revise and extend their remarks on H.R.
4938.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from New York?
There was no objection.
Mr. SERRANO. I yield myself as much time as I may consume.
Mr. Speaker, the bill before us provides for a 1-month extension of
the Recovery Act small business lending program and provides an
additional $40 million for this program. Through March 12 of this year,
the small business lending program has supported nearly $23 billion in
small business lending which helped create or retain over 560,000 jobs.
The program eliminated the fees that borrowers and certain lenders are
normally charged for loans through the Small Business Administration's
7(a) and 504 loan programs. The Recovery Act also increased the
government's guarantees on the 7(a) loans from 75 percent to 90
percent.
Mr. Speaker, 7(a) is the SBA's primary program for helping startup
and existing small businesses with financing guaranteed for a variety
of general business purposes. SBA does not make loans itself but rather
guarantees loans made by participating private lending institutions.
Like most commercial loans, these loans are typically variable rate.
The 504 program provides growing businesses with long-term, fixed-
rate financing for major fixed assets, such as land and buildings,
through Certified Development Companies. A Certified Development
Company, CDC, is a private, nonprofit corporation set up to contribute
to the economic development of the community it serves.
When credit markets froze in late 2008, credit markets that service
small businesses froze as well and have continued to be hard hit. These
provisions have been working to loosen up the credit market for small
businesses so they can stay in business, keep people employed, and make
new hires.
As we know, in a very bipartisan way, we have all felt that there is
nothing more important we could do right now but to allow for small
businesses to thrive as we move to create jobs in our economy. And so I
would hope that everybody in a unanimous fashion, Mr. Speaker, can
support this bill.
I reserve the balance of my time.
Mrs. EMERSON. Mr. Speaker, I yield myself such time as I may consume.
All Members, all of us, have been hearing from our constituents that
banks are not lending to small businesses. The Financial Services
Appropriations Subcommittee has heard testimony that this is the result
of banks' unwillingness to take risks or reduce their capital reserves.
In addition, bank regulators have increased scrutiny on lending
practices. The funding and language included in this bill attempts to
address this problem by increasing the SBA loan guarantee to 90 percent
for certain small business loans and eliminating, as the chairman said,
certain borrower fees associated with SBA's business loans. I greatly
appreciate that my chairman, Jose Serrano, has not increased spending
in this bill but is allowing SBA to use other available resources to
continue funding these programs.
With unemployment at almost 10 percent, now is not the time to make
it harder for small businesses to get credit, and these programs should
and must be continued. However, I have to say that I am a bit troubled
with the manner in which this bill is being considered. Just yesterday,
the House passed the Disaster Relief and Summer Jobs Act that includes
funding and language to continue these SBA programs through April. So
my question is, which bill does the majority intend the Senate to act
on? If yesterday's bill was not so controversial, perhaps today's bill
would not be necessary.
Neither the disaster bill nor the SBA bill was marked up by the
Appropriations Committee. The majority did not seek input from the
minority in either of these bills. We've known since the enactment of
the stimulus bill over a year ago that SBA did not have sufficient
funding to continue these programs through fiscal year 2010. Yet
instead of dealing with it in a more comprehensive manner either in the
fiscal year 2010 omnibus or in a committee markup earlier this year,
we're now only providing SBA with enough funding to continue these
programs for one additional month. We could have marked up a bill in
committee that provides SBA with sufficient funding for the rest of the
fiscal year and come up with a spending offset that both sides of the
aisle could agree to. Instead, we'll continue to create anxiety for
small businesses, lenders, and the SBA that borrower fees will increase
and guarantees will decrease at the end of April.
I have great, great respect for Chairman Serrano, and I'm sure he
would also like to deal with this problem in a comprehensive manner as
opposed to on a month-to-month basis. Mr. Speaker, I support Chairman
Serrano's proposed legislation because of its importance in providing
credit to small businesses. However, I am disappointed that we are only
temporarily addressing this program. I am also disappointed that we
didn't consider this legislation in regular order.
I reserve the balance of my time.
Mr. SERRANO. Mr. Speaker, first of all, I want to thank my ranking
member, Mrs. Jo Ann Emerson, who is a true partner in the work we do in
our committee. We are an example of how to work together. I want to
also thank her, Mr. Speaker, for the fact that she noted that I'm not
spending one extra dollar here. This is not raising the deficit at all.
Mrs. EMERSON. Will the chairman yield?
Mr. SERRANO. I will yield.
Mrs. EMERSON. I am very proud of you, and I just wanted you to know
that.
Mr. SERRANO. Well, I am very happy that you're proud of me. Mr.
Speaker, I am very happy that she's proud of me.
Mr. Speaker, I do want to clarify something, and the question that
Mrs. Emerson asked is a very legitimate question: Why are we doing this
the way we're doing it? Simply because we have not been able to get the
other body, if I'm allowed to refer to them, to accept anything other
than these kinds of bills at this point. And in answer to her second
question, Which bill will we give the Senate, the one that we passed,
or the one hopefully we'll pass today, the answer is, whichever one
they'll take to deal with the issue. So that is really the problem
here. Hopefully it will be resolved very soon.
I reserve the balance of my time.
Mrs. EMERSON. Mr. Speaker, I would just like to, once again, thank
Chairman Serrano. I know he feels very strongly, as I do, that we have
to find a way to make this permanent rather than force people to be
anxious on a month-to-month basis. Hopefully in the next few months
we'll be able to create some kind of bill or be able to satisfy all of
the people who are so desperate to take the risk and become
entrepreneurs and really make a difference in putting people back to
work. So with that, I thanks the chairman, I thank the Speaker.
I yield back the balance of my time.
Mr. SERRANO. Mr. Speaker, I am in total agreement with my ranking
member. It is our desire to make this permanent. We will continue to
work on this. In the meantime, this provides the assistance that small
businesses need in this country.
Ms. RICHARDSON. Mr. Speaker, I rise in strong support of H.R. 4938,
which extends the Small Business Loan Guarantee Program.
I support this legislation because in these difficult economic times,
extending the Small Business Loan Guarantee Program to extend
opportunities to 26.8 million small businesses is a critical component
of our economic recovery.
H.R. 4938 permits the use of $40 million of the funds provided in the
FY 2010 Omnibus
[[Page H2416]]
Appropriations Act for fee reductions and eliminations under the Small
Business Administration section 7(a) loan program and the section 504
certified development company program, as well as for the cost of
guaranteed loans for qualifying small businesses. The measure also
extends through April 30 the ability of the SBA to guarantee up to 90
percent of qualifying small business loans originating under the 504
program, and to refinance such loans.
Small businesses employ just over half of all private sector
employees, with a payroll of about $175 billion, and create many of the
new jobs we need.
In my district, the 37th Congressional District of California, there
are approximately 16,300 small businesses.
But in the global economy of the 21st century, small businesses, very
much like the banks and the auto industry, need sound fiscal options to
remain competitive, especially in difficult economic times for them and
their customers.
This is where the Small Business Administration can help.
The SBA exists to aid and protect the interests of small business
concerns, to preserve free competitive enterprise and to maintain and
strengthen the overall economy of our Nation.
The SBA was established in 1953 by the Federal Government to aid,
counsel, assist and protect the interests of small business concerns,
to preserve free competitive enterprise and to maintain and strengthen
the overall economy of our Nation.
The SBA's Office of Business Development assists firms owned and
controlled by economically and socially disadvantaged individuals enter
the economic mainstream by providing firm-specific analyses,
counseling, management training, professional consulting and monitoring
services, and access to business development opportunities under
section 8(a) of the Small Business Act.
Much like the loan guarantee program, the Section 8(a) program is
well intended. But one of its problems is that too often program
participants are ``graduated'' before they are sufficiently prepared to
compete for contracts with large and established companies in the
private sector.
This has resulted in a large number of former 8(a) companies failing
to remain in business shortly after leaving the development program.
I have introduced legislation that can build upon the loan guarantee
program extended by H.R. 493 and which would eliminate the problem of
``graduating'' Section 8(a) program participants before they are
sufficiently prepared to compete for contracts with large and
established companies in the private sector.
My legislation, H.R. 4897, the ``Not Too Small To Succeed in Business
Act,'' reforms and modernizes the Section 8(a) program to help more
small and disadvantaged business enterprises (DBE) remain in business
and hire more workers by doing the following:
1. Amending the Small Business Act to increase the net worth limits--
to $750,000--used by SBA in determining whether an applicant satisfies
the ``economically disadvantaged'' requirement for admission to the
program and increases to $2.25 million the net worth required for early
graduation from the program.
2. Extending the Section 8(a) program period to 11 years, from the
current 9 years.
3. Granting a one-time 2-year reinstatement in the Section 8(a)
program for companies who were graduated from the program at the
expiration of the 9 year term.
Mr. Speaker, extending the SBA Loan Guarantee Program and amending
the Section 8(a) Small and Disadvantaged Business Enterprise Program
are a necessary part of strengthening our SBA programs to help small
business succeed and provide jobs for our people. I urge all Members to
join me in voting for H.R. 4938.
Mr. SERRANO. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from New York (Mr. Serrano) that the House suspend the rules
and pass the bill, H.R. 4938.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
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