[Congressional Record Volume 158, Number 60 (Wednesday, April 25, 2012)]
[Senate]
[Pages S2732-S2733]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE (for herself, Ms. Landrieu, and Mrs. Shaheen):
  S. 2364. A bill to extend the availability of low-interest 
refinancing under the local development business loan program of the 
Small Business Administration; to the Committee on Small Business and 
Entrepreneurship.
  Ms. SNOWE. Mr. President, I rise today to urge my colleagues to 
support a one-year extension of the Small Business Administration, SBA, 
504 loan refinancing program that was originally authorized in the 
Small Business Jobs Act of 2010. This bill would allow small business 
owners to use 504 loans to refinance up to 90 percent of existing 
commercial mortgages.
  The 504 loan program provides approved small businesses with long-
term, fixed-rate financing used to acquire fixed assets for expansion 
or modernization. According to the SBA, as of February 15, 2012, the 
$50 billion in 504 loans has created over 2 million jobs. The 
refinancing option in the Small Business Jobs Act authorized $7.5 
billion in refinancing until September 27, 2012. Unfortunately, because 
of a delay in promulgating regulations to enable refinancing, the 
program did not become operational until a few months ago, 
significantly shortening the period of time that business could 
refinance existing 504 loans. The 504 loan program also comes at no 
cost to taxpayers, has created jobs and will provide much needed relief 
to businesses for one additional year.
  America's small business owners face a daunting business life cycle 
that is volatile at best: according to the SBA, while seven out of 10 
new employer firms survive for at least 2 years, only \1/3\ of these 
firms exist after 10 years. These failure rates are quite constant for 
different industries. Yet one factor that is a bell-weather for success 
is access to capital. The SBA identifies the

[[Page S2733]]

major factors in a firm's survivability as including: an ample supply 
of capital, being large enough to have employees, the owner's education 
level, and the owner's reason for starting the firm.
  Clearly, the drive of an entrepreneur is a major factor in start-ups 
where statistics from the 2008 ``Report to the President on the Small 
Business Economy'' delivered by SBA's Office of Advocacy, show that in 
2005, more than 12 million individuals were involved in starting 7 
million ventures. After six years, only one third of entrepreneurs have 
a working business despite the fact that they put in 9.9 billion hours 
of uncompensated time in 2005 launching their businesses. These 
uncompensated hours represented 2.7 percent of total paid work in the 
United States that year and almost one half of the hours for all 
American self-employed workers. That is an incredible effort of time 
and talent and a show of great risk taking.
  A number of small businesses utilize 504 loans as long-term, fixed-
rate financing used to acquire fixed assets for expansion or 
modernization. These 504 loans are made available through Certified 
Development Companies, CDCs, SBA's community based partners for 
providing 504 loans. The 504 loan program offers small businesses both 
immediate and long-term benefits, so business owners can focus on 
growing their business. These benefits include 90 percent financing, 
longer loan amortizations, no balloon payments, fixed-rate interest 
rates, and savings that result in improved cash flow for small 
businesses.
  Generally, a business must create or retain one job for every $65,000 
guaranteed by the SBA under this program. Small manufacturers must 
create or retain a ratio of one job for every $100,000 guaranteed. In 
addition, the 504 program serves to revitalize a business district, 
expand exports, promote small businesses owned and controlled by women, 
minorities and veterans, especially service-disabled veterans, aid 
rural development, and increase productivity and competitiveness.
  As I mentioned at the outset of my remarks, the 504 program is a job 
creator that does not receive any appropriated funds. The 1-year 
extension of the refinancing for the 504 loan program will allow 
businesses to retain employees and it also comes at zero cost to 
taxpayers. These are solid measures that will help small businesses at 
a time when many small enterprises are struggling to keep their 
employees and run basic operations. I ask my colleagues to support this 
legislation as swiftly as possible, as our Nation's capital-starved 
small businesses deserve no less.
                                 ______