[Congressional Record Volume 161, Number 119 (Monday, July 27, 2015)]
[House]
[Pages H5508-H5510]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
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VETERANS ENTREPRENEURSHIP ACT OF 2015
Mr. CHABOT. Mr. Speaker, I move to suspend the rules and concur in
the Senate amendment to the bill (H.R. 2499) to amend the Small
Business Act to increase access to capital for veteran entrepreneurs,
to help create jobs, and for other purposes.
The Clerk read the title of the bill.
The text of the Senate amendment is as follows:
Senate amendment:
At the end, add the following:
SEC. 4. BUSINESS LOANS PROGRAM.
(a) Section 7(a) Funding Levels.--The third proviso under
the heading ``business loans program account'' under the
heading ``Small Business Administration'' under title V of
division E of the Consolidated and Further Continuing
Appropriations Act, 2015 (Public Law 113-235; 128 Stat. 2371)
is amended by striking ``$18,750,000,000'' and inserting
``$23,500,000,000''.
(b) Loan Limitations.--Section 7(a)(1) of the Small
Business Act (15 U.S.C. 636(a)(1)) is amended--
(1) in subparagraph (A)--
(A) by striking ``No financial assistance'' and inserting
the following:
``(i) In general.--No financial assistance''; and
(B) by adding at the end the following:
``(ii) Liquidity.--On and after October 1, 2015, the
Administrator may not guarantee a loan under this subsection
if the lender determines that the borrower is unable to
obtain credit elsewhere solely because the liquidity of the
lender depends upon the guaranteed portion of the loan being
sold on the secondary market.''; and
(2) by adding at the end the following:
``(C) Lending limits of lenders.--On and after October 1,
2015, the Administrator may not guarantee a loan under this
subsection if the sole purpose for requesting the guarantee
is to allow the lender to exceed the legal lending limit of
the lender.''.
(c) Reporting.--
(1) Definitions.--In this subsection--
(A) the term ``Administrator'' means the Administrator of
the Small Business Administration;
(B) the term ``business loan'' means a loan made or
guaranteed under section 7(a) of the Small Business Act (15
U.S.C. 636(a));
(C) the term ``cancellation'' means that the Administrator
approves a proposed business loan, but the prospective
borrower determines not to take the business loan; and
(D) the term ``net dollar amount of business loans'' means
the difference between the total dollar amount of business
loans and the total dollar amount of cancellations.
(2) Requirement.--During the 3-year period beginning on the
date of enactment of this Act, the Administrator shall submit
to Committee on Small Business and Entrepreneurship and the
Committee on Appropriations of the Senate and the Committee
on Small Business and the Committee on Appropriations of the
House of Representatives a quarterly report regarding the
loan programs carried out under section 7(a) of the Small
Business Act (15 U.S.C. 636(a)), which shall include--
(A) for the fiscal year during which the report is
submitted and the 3 fiscal years before such fiscal year--
(i) the weekly total dollar amount of business loans;
(ii) the weekly total dollar amount of cancellations;
(iii) the weekly net dollar amount of business loans--
(I) for all business loans; and
(II) for each category of loan amount described in clause
(i), (ii), or (iii) of section 7(a)(18) of the Small Business
Act (15 U.S.C. 636(a)(18));
(B) for the fiscal year during which the report is
submitted--
(i) the amount of remaining authority for business loans,
in dollar amount and as a percentage; and
(ii) estimates of the date on which the net dollar amount
of business loans will reach the maximum for such business
loans based on daily net lending volume and extrapolations
based on year to date net lending volume, quarterly net
lending volume, and quarterly growth trends;
(C) the number of early defaults (as determined by the
Administrator) during the quarter covered by the report;
(D) the total amount paid by borrowers in early default
during the quarter covered by the report, as of the time of
purchase of the guarantee;
(E) the number of borrowers in early default that are
franchisees;
(F) the total amount of guarantees purchased by the
Administrator during the quarter covered by the report; and
(G) a description of the actions the Administrator is
taking to combat early defaults administratively and any
legislative action the Administrator recommends to address
early defaults.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Ohio (Mr. Chabot) and the gentlewoman from New York (Ms. Velazquez)
each will control 20 minutes.
The Chair recognizes the gentleman from Ohio.
General Leave
Mr. CHABOT. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days to revise and extend their legislative remarks
and include extraneous materials in the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Ohio?
There was no objection.
Mr. CHABOT. Mr. Speaker, I yield myself such time as I may consume.
Two weeks ago, on July 13, this Chamber overwhelmingly passed H.R.
2499. This legislation provides greater assistance to our veteran
entrepreneurs by making Small Business Administration, SBA, loans more
affordable for veterans.
It permanently waives the up-front fee charged by the SBA to
borrowers through the agency's 7(a) Express loan program without
imposing any additional costs on taxpayers.
As my colleagues are aware, the SBA's 7(a) loan guarantee program is
vital for small businesses to get the capital needed for growth of the
American economy. As the economic outlook begins to brighten, more
small businesses than ever before are taking advantage of this program.
Despite a significant increase in demand over the past several
months, Congress was not notified until June 25 that the program was
dangerously close to its authorized lending authority of $18.75 billion
and might surpass it prior to the end of the fiscal year.
Such eleventh hour notification makes it difficult for Congress to
act. Yet, Congress is acting swiftly to help America's small
businesses, businesses that no longer could get SBA-guaranteed loans as
of noon on July 23, when the SBA reached its authorized limit.
I want to thank my counterparts in the other body for working quickly
to resolve this matter and offering an amendment to H.R. 2499, the
veterans bill.
This amendment ensures that the SBA will have sufficient authority to
guarantee loans through the end of the fiscal year. This increase comes
at no cost to the taxpayer. Let me repeat that. At no cost to the
taxpayer.
That is because the fees paid by the users of the program--not
taxpayers--cover the costs of the program. This is a win-win situation,
as this will allow banks to continue offering 7(a) loans.
Further, this amendment also ensures that, from now on, Congress will
be informed on a regular basis about the status of a loan program and
lending authority limits.
This will ensure that Congress can address the situation in a
timelier manner and inquire of the SBA what steps it might use
administratively to ameliorate a situation in which the agency might
exceed its lending authorization level.
The amendment ensures that we do not repeat the experience of the
previous 2 years, where Congress at the eleventh hour had to scramble
for a solution because it wasn't notified by the SBA of its problem
until the last minute.
This is truly a time-sensitive issue that needs to be corrected
today. Between noon and 2:30 on July 23, the
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SBA stated that it had 315 new loans totaling $220 million waiting in
the queue. These are small firms who need the money in hand now to grow
their companies and create jobs.
I want to take the time to highlight that this legislation would not
have come together without extraordinary bipartisan, bicameral efforts.
I would like to thank Senator Vitter, the chairman of the Senate
Committee on Small Business and Entrepreneurship, for his leadership on
this issue.
He worked tirelessly over the past few weeks to develop a solution
that would be acceptable to the Senate and to the House.
I would also like to thank Senators Risch, Shaheen, Peters, and
Coons, who each cosponsored the amendment.
Further, on this side of the Capitol, I would be remiss if I did not
mention the efforts of the gentleman from Florida (Mr. Crenshaw), who
will be speaking here soon, and the gentleman from New York (Mr.
Serrano) and their expertise and assistance in resolving this matter.
And I wanted to offer a special thanks to our committee's ranking
member, the gentlewoman from New York (Ms. Velazquez), for her insight
and leadership.
In addition to offering the bill H.R. 3132, to increase the lending
authority, she was steadfast in her efforts to repeatedly warn the SBA
that continuing to issue 7(a) loan guarantees for the maximum amount
allowed by statute, yet failing to take administrative action to manage
loan guarantees as the SBA crept closer to its lending authority, could
result in a cessation of the lending.
The ranking member and her staff were extremely helpful in bringing
this matter to a resolution and are to be commended for helping to
craft a strong, bipartisan product, which is what we are dealing with
here today.
This legislation, as amended by the Senate, provides two critical
items for the 7(a) program. It allows us to support veteran
entrepreneurs for years to come at no cost by waiving fees, and it
ensures that the program continues to run, since waiving fees on a
program that can no longer offer loans doesn't help anyone. It is a
smart, commonsense approach which passed the Senate by unanimous
consent.
I urge my colleagues to concur in the Senate amendment to the bill
H.R. 2499, as amended, by the Senate.
I reserve the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may
consume.
For the past 4 years, our Nation has faced economic headwinds, but
was able to break through and strengthen considerably.
In that time, over 12 million jobs have been created, the stock
market has come roaring back, and optimism in the small business sector
has returned to prerecession levels.
As we all know, small businesses are the driving force in our
Nation's economy, creating two out of three new jobs and producing
roughly 50 percent of our GDP. In order to fulfill that role, they need
capital.
One option is SBA's 7(a) Loan Program, which has been very popular
over the past 2 years. In 2014, the program made over 52,000 loans,
totaling $19 billion, one of its best years since 2007. SBA carried
that momentum into 2015, growing another 20 percent overall, which
brings us to today.
Due to this unexpected robust lending activity, SBA learned it will
reach its $18.75 billion lending cap before the end of the year,
cutting off thousands of borrowers.
The chairman is totally correct when he talks about the issue of SBA
not notifying Congress in the proper time.
Last week I introduced H.R. 3132 to raise the cap to $23.5 billion,
giving SBA over $4 billion in additional authority to provide capital
to deserving small businesses. Unfortunately, the cap was reached on
Thursday before we could get that bill to the floor.
Today's bill includes my language to raise the lending cap to $23.5
billion. It will mean a significant capital infusion into the economy.
With these types of loans flowing again, small companies will have
more resources to expand their facilities, reinvest in their
operations, and create jobs.
When a small manufacturer can access these loans, they can build
additional warehouse space, creating both short-term and long-term
employment opportunities.
Restaurants and retailers can use this capital to pay vendors,
freeing up funding to keep employees on their payrolls, and potentially
hire more workers.
This bill does require additional reporting requirements and other
changes at SBA. While I would have liked to have seen a clean increase
in the authorization level, we all recognize the critical role the 7(a)
program plays. This compromise will turn the spigot back on, helping
entrepreneurs grow and create jobs.
I want to thank Senators Vitter and Shaheen, Leader Pelosi, Ranking
Serrano, and especially Chairman Chabot for working in a bipartisan
manner to bring this bill to the floor.
I reserve the balance of my time.
Mr. CHABOT. Mr. Speaker, I yield such time as he may consume to the
gentleman from Florida (Mr. Crenshaw), who is the chairman of the
Subcommittee on Financial Services and General Government of the
Committee on Appropriations.
Mr. CRENSHAW. I thank the gentleman for yielding the time.
Mr. Speaker, as has been pointed out, this is legislation that is the
result of the hard work of the Small Business Committee here in the
House, the Appropriations Committee here in the House, along with the
United States Senate.
What this does, as has been pointed out, is simply allows the 7(a)
lending program to continue on. It is a program that doesn't cost the
taxpayers any money, and, yet, it allows the Small Business
Administration to lend money to thousands of small businesses all
across this country to keep the economy growing, to keep jobs being
created.
And as chairman of the subcommittee that oversees and funds this
program, the SBA, let me assure my colleagues that this will not
require any additional appropriations this year.
It would simply lift the cap, as has been pointed out, let this
continue on, and, again, do the good job that the SBA does.
So I urge my colleagues to support this. I thank everyone involved
that has worked in such a timely manner to make this happen so quickly
so that we don't interrupt the lending that goes on.
Ms. VELAZQUEZ. Mr. Speaker, I yield 3 minutes to the gentlewoman from
Michigan (Mrs. Lawrence).
Mrs. LAWRENCE. Mr. Speaker, I rise today in support of H.R. 2499, the
Veterans Entrepreneurship Act of 2015.
The Small Business Administration 7(a) Loan Program is a critical
source of capital for America's entrepreneurs and is SBA's largest and
most important program in terms of the number of loans and programs
supported.
My home State of Michigan, where I am proud to serve as the
congressional Representative, has benefited greatly from the SBA 7(a)
Loan Program.
In fiscal year 2013, the SBA guaranteed nearly 2,000 loans to
Michigan small businesses through the 7(a) Loan Program for more than
$500 million. Michigan ranked second in the Nation that year for all
SBA loans.
Even better, in fiscal year 2014, the SBA guaranteed more than 2,000
loans to Michigan small businesses, for more than $600 million. This
was an increase of 17 percent over the previous fiscal year.
This immensely successful program continues to show strong success,
with loan volume up 20 percent this year over last year.
Unfortunately, the lending cap established in the 2015 omnibus
appropriations bills of about $18 billion was reached last week.
That means that roughly $3 billion in loan programs needed for small
American businesses have been stalled, putting America's entrepreneurs
at a serious financial risk.
H.R. 2499 will reopen the crucially needed 7(a) Loan Program for
America's small businesses and provide a fee waiver for our Nation's
veterans who are seeking new careers after service to our country.
I am proud to be a cosponsor of this bill that would raise the cap of
7(a) loans to over $23 billion.
I want to thank the chairman and the ranking member for their
leadership on this issue. I strongly urge my
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colleagues to join me in supporting the underlying bill.
Mr. CHABOT. Mr. Speaker, at this time I have no additional speakers,
and I reserve the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, I yield 3 minutes to the gentleman from
Hawaii (Mr. Takai), the ranking member on the Contracting and Workforce
Subcommittee.
Mr. TAKAI. Mr. Speaker, first of all, I would like to thank Chairman
Chabot and Ranking Member Velazquez for this opportunity.
Mr. Speaker, on Friday, the 7(a) program reached its loan guarantee
program limit for the year. As a result, the Small Business
Administration was forced to suspend its 7(a) small business lending
until the start of the new fiscal year or until such time as the 7(a)
program is reauthorized or increased by Congress.
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Over 20 of my colleagues joined me in sending a letter to Speaker
Boehner asking to bring this legislation to the floor to raise this
limit before Congress goes on its August work period break.
While I am thankful that we are finally doing this, it only speaks to
the pattern of inaction that has plagued us here in Congress. Right
now, because of this inaction, small businesses across the country are
facing the uncertainty of where their next loan will come from.
Lenders use the 7(a) program to fund working capital and other
critical needs to small businesses, and the SBA provides a backstop by
guaranteeing this loan in case the borrower defaults.
Due to restrictive marketing conditions, SBA programs like the 7(a)
loan program have seen an increase in usage by small businesses, making
it more imperative that the lending limit be increased for this
program. As you know, Mr. Speaker, over 90 percent of the American
businesses are considered small and make up the backbone of our
Nation's economy.
It is critical to note that the 7(a) program is funded entirely by
guarantee fees paid by the program beneficiaries, not taxpayer dollars.
Increasing this loan limit will not increase our national debt or
deficit, but it will mean that small businesses can get access to the
credit they need to expand and create jobs in our communities. Without
SBA loan options, millions of small businesses will have to resort to
practices not in their best interest.
I came to Congress assuring my constituents that we would break this
pattern of crisis and do our jobs. This shouldn't be a last-minute
issue. Let's be sure our small businesses have the resources they need
to continue being the engine of our economy.
Mr. CHABOT. Mr. Speaker, I reserve the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, I yield myself the balance of my time.
Evidence points to an economy that is slowly but surely on the mend.
The Federal Reserve reports banks are more willing to lend and small
business demand is clearly picking up at an accelerated pace. This
month alone, SBA has guaranteed over $3 billion in the 7(a) program--an
all-time record.
Providing the Agency with additional lending authority will ensure
creditworthy firms will continue to have access to low cost capital for
the rest of the fiscal year.
I want to again thank Chairman Chabot for working with me to bring
this bill to the floor.
I ask my colleagues to support this bill, and I yield back the
balance of my time.
Mr. CHABOT. Mr. Speaker, I yield myself such time as I may consume to
close.
Mr. Speaker, I again want to thank the gentlewoman from New York (Ms.
Velazquez), our ranking member on the Small Business Committee, for her
cooperation and her hard work in making sure that we resolve this
sticky issue and that small businesses across the country who need
access to capital will get that access. So I definitely want to make
sure that it is recognized that we have been working on this in a
bipartisan and cooperative effort.
I again want to stress that it is critical that we pass H.R. 2499
today for the benefit of both our veterans and also the benefit of the
entire small business community, which right now is unable to obtain
loans from the flagship SBA 7(a) lending program since last Friday.
I would also note that there are reforms in this bill so that the SBA
has to bring notice to Congress to let us know up front next time and
not wait until the eleventh hour to notify Congress that they are in
trouble. Hopefully, this will resolve this so that we don't see this in
the future, that we will get notification on a fairly regular basis and
not put the elected representatives of the American people in this kind
of dilemma where we have to act at the last minute and that we
basically put small businesses all across the country in jeopardy of
not having access to loans.
As we know, by pushing this forward along with the veterans bill,
which, in essence, waived the fee that they would have had to pay so
that veterans have access to loans that they need to grow a business or
to create businesses since they have worn the uniform of our country,
we certainly need to do everything we can to help them, and this bill
does that as well.
As has been mentioned by Mr. Takai and others, this does not cost the
taxpayers any additional dollars because the money for this is
generated from the fees of those who take advantage of the program, so
it is a win-win all around.
I urge my colleagues to vote to concur on the Senate amendment to
H.R. 2499, and I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Ohio (Mr. Chabot) that the House suspend the rules and
concur in the Senate amendment to the bill, H.R. 2499.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the Senate amendment was concurred in.
A motion to reconsider was laid on the table.
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