[Congressional Record Volume 166, Number 204 (Thursday, December 3, 2020)]
[House]
[Pages H6068-H6072]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
COMMUNITY ADVANTAGE LOAN PROGRAM
Ms. VELAZQUEZ. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 7903) to amend the Small Business Act to establish the
Community Advantage Loan Program, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 7903
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. COMMUNITY ADVANTAGE LOAN PROGRAM.
Section 7(a) of the Small Business Act (15 U.S.C. 636(a))
is amended by adding at the end the following:
``(37) Community advantage loan program.--
``(A) Purposes.--The purposes of the Community Advantage
Loan Program are--
``(i) to create a mission-oriented loan guarantee program
that builds on the demonstrated success of the Community
Advantage Pilot Program of the Administration, as established
in 2011, to reach more underserved small business concerns;
``(ii) to increase lending to small business concerns in
underserved and rural markets, including veterans and members
of the military community, small business concerns owned and
controlled by socially and economically disadvantaged
individuals, women, and startups;
``(iii) to ensure that the program under this subsection
(in this paragraph referred to as the `7(a) loan program') is
more inclusive and more broadly meets congressional intent to
reach borrowers who are unable to get credit elsewhere on
reasonable terms and conditions;
``(iv) to help underserved small business concerns become
bankable by utilizing the small-dollar financing and business
support experience of mission-oriented lenders;
``(v) to allow certain mission-oriented lenders, primarily
nonprofit financial intermediaries focused on economic
development in underserved markets, to access guarantees for
loans under this subsection (in this paragraph referred to as
`7(a) loans') of not more than $250,000 and provide
management and technical assistance to small business
concerns as needed;
``(vi) to provide certainty for the lending partners that
make loans under this subsection and to attract new lenders;
and
``(vii) to encourage collaboration between mission-oriented
and conventional lenders under this subsection in order to
support underserved small business concerns.
``(B) Definitions.--In this paragraph--
``(i) the term `covered institution' means--
``(I) a development company, as defined in section 103 of
the Small Business Investment Act of 1958 (15 U.S.C. 662),
participating in the 504 Loan Guaranty program established
under title V of such Act (15 U.S.C. 695 et seq.);
``(II) a nonprofit intermediary, as defined in subsection
(m)(12), participating in the microloan program under
subsection (m);
``(III) a non-Federally regulated entity certified as a
community development financial institution by the Community
Development Financial Institutions Fund established under
section 104(a) of the Riegle Community Development and
Regulatory Improvement Act of 1994 (12 U.S.C. 4703(a)); and
``(IV) an eligible intermediary, as defined in subsection
(l)(1), as in effect on the day before the date of enactment
of this paragraph, that participated in the Intermediary
Lending Pilot Program established under subsection (l)(2);
``(ii) the term `existing business' means a small business
concern that has been in existence for not less than 2 years
on the date on which a loan is made to the small business
concern under the program;
``(iii) the term `new business' means a small business
concern that has been existence for not more than 2 years on
the date on which a loan is made to the small business
concern under the program;
``(iv) the term `program' means the Community Advantage
Loan Program established under subparagraph (C);
``(v) the term `Reservist' means a member of a reserve
component of the Armed Forces named in section 10101 of title
10, United States Code;
``(vi) the term `rural area' means any county that the
Bureau of the Census has defined as mostly rural or
completely rural in the most recent decennial census;
``(vii) the term `service-connected' has the meaning given
the term in section 101(16) of title 38, United States Code;
``(viii) the term `small business concern in an underserved
market' means a small business concern--
``(I) that is located in--
``(aa) a low- to moderate-income community;
``(bb) a HUBZone;
``(cc) a community that has been designated as an
empowerment zone or an enterprise community under section
1391 of the Internal Revenue Code of 1986;
``(dd) a community that has been designated as a promise
zone by the Secretary of Housing and Urban Development;
``(ee) a community that has been designated as a qualified
opportunity zone under section 1400Z-1 of the Internal
Revenue Code of 1986;
``(ff) a rural area; or
``(gg) any area for which a disaster declaration or
determination described in subparagraphs (A), (B), (C), or
(E) of subsection (b)(2) has been made that has not
terminated or expired more than 2 years before the date (or
later, as determined by the Administrator) on which a loan is
made to such concern under the program;
``(II) for which more than 50 percent of the employees
reside in a low- or moderate-income community;
``(III) that is a startup or new business;
``(IV) owned and controlled by socially and economically
disadvantaged individuals, including Black Americans,
Hispanic Americans, Native Americans, Asian Pacific
Americans, and other minorities;
``(V) owned and controlled by women;
``(VI) owned and controlled by veterans;
``(VII) owned and controlled by service-disabled veterans;
``(VIII) not less than 51 percent owned and controlled by
one or more--
``(aa) members of the Armed Forces participating in the
Transition Assistance Program of the Department of Defense;
``(bb) Reservists;
``(cc) spouses of veterans, members of the Armed Forces, or
Reservists; or
``(dd) surviving spouses of veterans who died on active
duty or as a result of a service-connected disability; or
``(IX) that is eligible to receive a veterans advantage
loan;
``(ix) the term `small business concern owned and
controlled by socially and economically disadvantaged
individuals' has the meaning given the term in section
8(d)(3)(C);
``(x) the term `startup' means a business that has not yet
opened; and
``(xi) the term `veterans advantage loan' means a loan made
to a small business concern under this subsection that is
eligible for a waiver of the guarantee fee under paragraph
(18) or the yearly fee under paragraph (23) because the small
business concern is a concern described in subclause (VI),
(VII), or (VIII) of clause (viii).
``(C) Establishment.--There is established a Community
Advantage Loan Program under which the Administration may
guarantee loans made by covered institutions under this
subsection, including loans made to small business concerns
in underserved markets.
``(D) Program levels.--In each of fiscal years 2021 through
2025, not more than 10 percent of the number of loans
guaranteed under this subsection may be guaranteed under the
program.
``(E) New lenders.--
``(i) Fiscal years 2021 and 2022.--In each of fiscal years
2021 and 2022--
[[Page H6069]]
``(I) not more than 150 covered institutions shall
participate in the program; and
``(II) the Administrator shall allow for new applicants and
give priority to applications submitted by any covered
institution that is located in an area with insufficient
lending under the program.
``(ii) Fiscal years 2023, 2024, and 2025.--
``(I) In general.--In each of fiscal years 2023, 2024, and
2025--
``(aa) except as provided in subclause (II), not more than
175 covered institutions shall participate in the program;
and
``(bb) the Administrator shall allow for new applicants and
give priority to applications submitted by any covered
institution that is located in an area with insufficient
lending under the program.
``(II) Exception for fiscal year 2025.--In fiscal year
2025, not more than 200 covered institutions may participate
in the program if--
``(aa) after reviewing the report under subparagraph
(M)(iii), the Administrator determines that not more than 200
covered institutions may participate in the program;
``(bb) the Administrator notifies Congress in writing of
the determination of the Administrator under item (aa); and
``(cc) not later than July 30, 2024, the Administrator
notifies the public of the determination of the Administrator
under item (aa).
``(F) Grandfathering of existing lenders.--Any covered
institution that participated in the Community Advantage
Pilot Program of the Administration and is in good standing
on the day before the date of enactment of this paragraph--
``(i) shall retain designation in the program; and
``(ii) shall not be required to submit an application to
participate in the program.
``(G) Requirement to make loans to underserved markets.--
Not less than 75 percent of loans made by a covered
institution under the program shall consist of loans made to
small business concerns in underserved markets.
``(H) Maximum loan amount.--
``(i) In general.--Except as provided in clause (ii), the
maximum loan amount for a loan guaranteed under the program
is $250,000.
``(ii) Exception.--
``(I) In general.--The Administration may, in the
discretion of the Administration, approve a guarantee of a
loan under the program that is more than $250,000 and not
more than $350,000.
``(II) Notification.--Not later than 2 days after approving
the guarantee of a loan under subclause (I), the
Administration shall provide notification of the approval to
the covered institution making the loan.
``(I) Interest rates.--
``(i) In general.--Except as provided in clause (ii), the
maximum allowable interest rate prescribed by the
Administration on any financing made on a deferred basis
pursuant to the program shall not exceed the maximum
allowable interest rate in effect on September 1, 2018.
``(ii) Modification.--The Administration shall not modify
the maximum allowable interest rate described in clause (i)
unless the Administration provides the public with an
opportunity to comment for a period of not less than 180 days
before implementing the modified interest rate.
``(J) Training and technical assistance.--The
Administration--
``(i) shall in person and online, provide upfront and
ongoing training and technical assistance for covered
institutions making loans under the program in order to
support prudent lending standards and improve the interface
between the covered institutions and the Administration;
``(ii) shall ensure that the training and technical
assistance described in clause (i) is provided for free or at
a low-cost; and
``(iii) may enter into a contract to provide the training
or technical assistance described in clause (i) with an
organization with expertise in lending under this subsection,
mission-oriented lending, and lending to underserved markets.
``(K) Delegated authority.--A covered institution is not
eligible to receive delegated authority from the
Administration under the program until the covered
institution makes not less than 7 loans under the program.
``(L) Regulations.--
``(i) In general.--Not later than 180 days after the date
of enactment of this paragraph and in accordance with the
notice and comment procedures under section 553 of title 5,
United States Code, the Administrator shall promulgate
regulations to carry out the program, which shall--
``(I) outline the requirements for participation by covered
institutions in the program;
``(II) define performance metrics for covered institutions
participating in the program for the first time, which are
required to be met in order to continue participating in the
program;
``(III) determine the credit score of a small business
concern under which the Administration is required to
underwrite a loan provided to the small business concern
under the program and the loan may not be made using the
delegated authority of a covered institution;
``(IV) require each covered institution that sells loans
made under the program on the secondary market to establish a
loan loss reserve fund, which--
``(aa) with respect to covered institutions in good
standing, including the covered institutions described in
subparagraph (F), shall be maintained at a level equal to 3
percent of the outstanding guaranteed portion of the loans;
and
``(bb) with respect to any other covered institution, shall
be maintained at a level equal to 5 percent of the
outstanding guaranteed portion of the loans; and
``(V) allow the Administrator to require additional amounts
to be deposited into a loan loss reserve fund established by
a covered institution under subclause (IV) based on the risk
characteristics or performance of the covered institution and
the loan portfolio of the covered institution.
``(ii) Pilot program.--
``(I) Reversion.--Beginning on the date of enactment of
this paragraph and ending on the day before the date on which
the regulations promulgated by the Administrator under clause
(i) take effect, the Administrator may only carry out the
Community Advantage Pilot Program of the Administration based
on applicable program guidelines, requirements, and other
policy in effect on September 1, 2018, except that the
definition of underserved market shall include--
``(aa) a community and an area described in items (ee) and
(ff), respectively, of subparagraph (B)(viii)(I); and
``(bb) small business concerns described in clauses (IV)
and (V) of subparagraph (B)(viii).
``(II) Termination.--Beginning on the date on which the
regulations promulgated by the Administrator under clause (i)
take effect, the Administrator may not carry out the
Community Advantage Pilot Program of the Administration.
``(M) Reporting.--
``(i) Weekly reports.--
``(I) In general.--The Administration shall report on the
website of the Administration, as part of the weekly reports
on lending approvals under this subsection--
``(aa) on and after the date of enactment of this paragraph
until the date on which the regulations promulgated under
subparagraph (L)(i) take effect, the number and dollar amount
of loans guaranteed under the Community Advantage Pilot
Program of the Administration; and
``(bb) on and after the date on which the Administration
begins to approve loans under the program, the number and
dollar amount of loans guaranteed under the program.
``(II) Separate accounting.--The number and dollar amount
of loans reported in a weekly report under subclause (I) for
loans guaranteed under the Community Advantage Pilot Program
of the Administration and under the program shall include a
breakdown by the categories of race, ethnicity, and gender of
the owners of the small business concerns.
``(ii) Annual reports.--
``(I) In general.--For each of the first 5 fiscal years in
which the program is in effect, the Administration shall
submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives, and make publicly
available on the internet, information about loans provided
under the program and under the Community Advantage Pilot
Program of the Administration.
``(II) Contents.--Each report submitted and made publicly
available under subclause (I) shall include--
``(aa) the number and dollar amounts of loans provided to
small business concerns under the program and under the
Community Advantage Pilot Program of the Administration,
including a breakdown by--
``(AA) the gender of the owners of the small business
concern;
``(BB) the race and ethnicity of the owners of the small
business concern, disaggregated in a manner that captures all
the racial groups specified in the American Community Survey
conducted by the Bureau of the Census;
``(CC) whether the small business concern is located in an
urban or rural area; and
``(DD) whether the small business concern is a startup, an
existing business, or a new business, as provided in the
weekly reports on lending approvals under this subsection;
``(bb) the proportion of loans described in item (aa)
compared to--
``(AA) other 7(a) loans of any amount;
``(BB) other 7(a) loans of similar amounts;
``(CC) express loans provided under paragraph (31) of
similar amounts; and
``(DD) other 7(a) loans of similar amounts provided to
small business concerns in underserved markets;
``(cc) a comparison of the number and dollar amounts of
loans provided to small business concerns under the program,
under the Community Advantage Pilot Program of the
Administration, and under each category of loans described in
item (bb), broken down by--
``(AA) loans of not more than $50,000;
``(BB) loans of more than $50,000 and not more than
$150,000;
``(CC) loans of more than $150,000 and not more than
$250,000; and
``(DD) loans of more than $250,000 and not more than
$350,000;
``(dd) the number and dollar amounts of loans provided to
small business concerns under the program and under the
Community Advantage Pilot Program of the Administration by
State, and the jobs created or retained within each State;
``(ee) with respect to loans provided to small business
concerns under the program
[[Page H6070]]
and under the Community Advantage Pilot Program of the
Administration--
``(AA) the performance of the loans provided by each type
of covered institution;
``(BB) the performance of the loans broken down by loan
size;
``(CC) the performance of the loans broken down by whether
the credit score of the borrower is above, below, or equal to
140;
``(DD) the predictive purchase rate of the loans;
``(EE) the early default rate of the loans;
``(FF) the 12-month default rate of the loans;
``(GG) the cumulative default rate for the loans for the 5-
year period preceding the report;
``(HH) the charge-off rates of the loans;
``(II) the charge-off rates as a percent of the unpaid
principal balance as in table 9 of the annual budget
submitted by the Administration; and
``(JJ) the purchase rates as a percent of the unpaid
principal balance as in table 8 of the annual budget
submitted by the Administration;
``(ff) a list of covered institutions participating in the
program and the Community Advantage Pilot Program of the
Administration, including--
``(AA) the name, location, and contact information, such as
the website and telephone number, of each covered
institution; and
``(BB) a breakdown by the number and dollar amount of the
loans approved for small business concerns; and
``(gg) the benchmarks established by the working group
under subparagraph (N)(i).
``(III) Timing.--An annual report required under this
clause shall--
``(aa) be submitted and made publicly available not later
than October 15 of each year; and
``(bb) cover the lending activity for the fiscal year that
ended on September 30 of that same year.
``(iii) GAO report.--Not later than 3 years after the date
of enactment of this paragraph, the Comptroller General of
the United States shall submit to the Administrator, the
Committee on Small Business and Entrepreneurship of the
Senate, and the Committee on Small Business of the House of
Representatives a report--
``(I) assessing--
``(aa) the extent to which the program fulfills the
requirements of this paragraph; and
``(bb) the performance of covered institutions
participating in the program; and
``(II) providing recommendations on the administration of
the program and the findings under items (aa) and (bb) of
subclause (I).
``(N) Working group.--
``(i) In general.--Not later than 90 days after the date of
enactment of this paragraph, the Administrator shall
establish a Community Advantage Working Group, which shall--
``(I) include--
``(aa) a geographically diverse representation of members
from among covered institutions participating in the program;
and
``(bb) representatives from the Office of Capital Access of
the Administration, including the Office of Credit Risk
Management, the Office of Financial Assistance, and the
Office of Economic Opportunity;
``(II) develop recommendations on how the Administration
can effectively manage, support, and promote the program and
the mission of the program;
``(III) establish metrics of success and benchmarks that
reflect the mission and population served by covered
institutions under the program, which the Administration
shall use to evaluate the performance of those covered
institutions; and
``(IV) institute regular and sustainable systems of
communication between the Administration and covered
institutions participating in the program.
``(ii) Report.--Not later than 180 days after the date of
enactment of this paragraph, the Administrator shall submit
to the Committee on Small Business and Entrepreneurship of
the Senate and the Committee on Small Business of the House
of Representatives a report that includes--
``(I) the recommendations of the Community Advantage
Working Group established under clause (i); and
``(II) a recommended plan and timeline for implementation
of those recommendations.
``(O) Termination.--The authority to carry out the program
under this paragraph shall terminate on September 30,
2025.''.
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
New York (Ms. Velazquez) and the gentleman from Ohio (Mr. Chabot) each
will control 20 minutes.
The Chair recognizes the gentlewoman from New York.
General Leave
Ms. VELAZQUEZ. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days in which to revise and extend their remarks
and include extraneous material on the measure under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from New York?
There was no objection.
Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, before I begin, I would like to take a moment to
recognize my good friend and colleague, Ranking Member Chabot. Mr.
Chabot has led this committee with me for years. Together, we have
worked in a bipartisan manner to pass legislation that will help
entrepreneurs across the country launch and grow their small
businesses.
Steve has been an absolute pleasure to work with. Not only is he
results-oriented, but he is strongly committed to bipartisanship and
finding common ground. While we do not always agree, Ranking Member
Chabot has always respected our views and the need to work together to
do the right thing for America's small businesses.
The bills we are bringing to the floor today represent our
committee's long tradition of collaboration.
Turning to the legislation now, I rise in support of the bill before
us today, H.R. 7903, which would codify the SBA's Community Advantage
Loan Program.
Initially launched in 2011 as a pilot program, Community Advantage
provides 7(a) loan guarantees to nonprofit lenders to make loans up to
$250,000 to small businesses in underserved markets.
As we all know, businesses in underserved areas have historically
struggled to access capital through conventional credit markets. This
is particularly true for minority-owned small businesses.
According to the Minority Business Development Agency, the loan
denial rates for minority-owned firms were about three times higher
compared to those of nonminority-owned firms with gross receipts under
$500,000.
To that end, the Community Advantage program partners with SBA's
certified development companies, SBA microlenders, and community
development financial institutions, or CDFIs, all of which have deep
relationships in the neighborhoods and can expand access to capital in
these areas.
The Community Advantage program reaches significantly more women and
minorities than traditional 7(a) loan programs, which will be critical
to helping these groups that were hit especially hard by the COVID-19
pandemic.
To fill gaps in lending, it is imperative that we empower the
community lenders with the strongest relationships in these areas. We
can accomplish this by passing the bill before us today to bring
stability and long-needed recognition to a program that has
successfully delivered over $770 million in capital since its
inception.
I thank Ms. Chu and Mr. Spano for working in a bipartisan manner on
this important legislation.
Mr. Speaker, I recommend a ``yes'' vote to all of my colleagues in
the House, and I reserve the balance of my time.
Mr. CHABOT. Mr. Speaker, I yield myself such time as I may consume.
I rise in support of H.R. 7903, as amended. This is a bill to improve
and authorize the SBA's Community Advantage Loan Program for 5 years.
Mr. Speaker, before I get into the business of the day, I would like
to mention that, with the passage of these four bills today, our
committee has produced 35 individual bipartisan pieces of legislation
that have passed the House just this Congress. We have had similar
numbers the previous two Congresses, as well. That is an uncommon
occurrence in a time of divided government.
The reason we have been so successful in improving the programs that
benefit America's more than 30 million small businesses is the
leadership and the bipartisanship of our chairwoman, Nydia Velazquez.
Now, this is my swan song, so to speak, here as the ranking member of
the committee, as I am term-limited and, therefore, unable to continue
serving in that role. I have had the pleasure of being on the Small
Business Committee--I am on the Foreign Affairs Committee and Judiciary
Committee, as well--for 12 terms now, representing Ohio's First
Congressional District. I have also been fortunate to have been the
ranking member two of those terms and the chair of the committee two of
those terms, as well. Again, that is why I am term-limited.
In each of those terms that I have spent in a leadership position on
the committee, my counterpart was Chairwoman or Ranking Member
Velazquez. She has remained a valued
[[Page H6071]]
friend and a reliable partner to do the things that we needed to do to
help the Nation's small businesses. I sincerely thank her for the
partnership that we have forged over the years.
We share a common bond of wanting to do everything in our power to
help America's small businesses, and we have consistently been able to
put partisan politics aside and work together to support that goal. So,
again, I thank her for her willingness to work with my staff and me
over those years, and I hope and trust that they will be able to
continue that relationship with my replacement, and I think that will
happen.
Finally, I mentioned staff before. I want to thank the longtime
Democratic Small Business Committee staffers Melissa Jung, Justin
Pelletier, Naveen Parmar, and Ellen Harrington for their extraordinary
commitment to bipartisanship over the years, regardless of who was
chair or who was the ranking member. Again, on that committee, we have
worked together for many years now.
Now, to the business at hand. When traditional and conventional
lending is out of reach for the Nation's smallest businesses, they have
the opportunity to turn to a number of the SBA's government guaranteed
lending programs.
For approximately 10 years, the SBA has been operating a Community
Advantage pilot program that combines access to capital and technical
assistance. The legislation before us today makes structural changes
and improvements in the program and authorizes it for 5 years.
With oversight and reporting requirements in place, this program will
continue to provide access to capital and consistency to the Nation's
job creators who truly need assistance.
I thank the gentleman from Florida (Mr. Spano) and the gentlewoman
from California (Ms. Judy Chu) for working in a bipartisan manner on
behalf of the Nation's smallest firms. They have both worked together
on this and previous legislation, both of them, in the spirit of
bipartisanship on that committee.
Mr. Speaker, I urge all of my colleagues to support H.R. 7903, which
was favorably reported out of the committee via voice vote, and I
reserve the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, I yield such time as she may consume to
the gentlewoman from California (Ms. Judy Chu), the sponsor of the bill
and the chair of the Subcommittee on Investigations, Oversight and
Regulations.
Ms. JUDY CHU of California. Mr. Speaker, I rise today in strong
support of my bill, H.R. 7903, which would authorize the Community
Advantage Loan Program for 5 years. To help our struggling economy, we
need a bipartisan bill that gets money to those who need it.
This bill, which I am proud to have introduced with my colleague,
Congressman Ross Spano, does just that by providing statutory
authorization to the Community Advantage program, already a proven and
successful pilot program.
Thanks to Community Advantage, underserved small businesses, which
typically have the hardest time accessing loans, can gain access to
affordable financing and technical assistance from mission-based,
primarily nonprofit lenders through SBA's 7(a) loan guarantee. That
means more money in more communities to keep our businesses operating.
This is something we need now more than ever.
The Community Advantage program was first established almost 10 years
ago as a pilot at the Small Business Administration with the goal of
delivering capital to the hard-to-reach businesses that need under
$250,000 in financing to grow. Since 2011, the program has facilitated
over $850 million in loans averaging $140,000 each. Compare that to the
average 7(a) loan of $530,000, and it is clear Community Advantage is
meeting a small business need that is unfilled by the traditional 7(a)
program.
It has also made a big impact in my district, where businesses have
received nearly $10 million in Community Advantage loans. That includes
businesses like Unincorporated Coffee Roasters in Altadena, California,
which received a Community Advantage loan last summer. This business
had been in operation for under 2 years, but their Community Advantage
loan allowed them to expand into the space next door and open a second
company to roast their own coffee beans for the wholesale market.
{time} 1515
They have even added jobs and continued to grow during the pandemic.
That is what can happen when we make small business loans just a little
less difficult to access. And it is an experience shared by businesses
across the country.
Last year, I chaired a hearing in the Subcommittee on Investigations,
Oversight and Regulations to examine the Community Advantage program.
We heard from borrowers and lenders about the ways that Community
Advantage has closed the credit gap for underserved businesses.
Because of their focus on economic and community development, the
mission-based lenders that facilitate Community Advantage loans can
leverage their strong relationships within the community to provide
accessibility, guidance, and assistance to the businesses that too
often find themselves on the margins without the ability to access
capital from traditional banks. As a result, Community Advantage is
able to reach far more businesses owned by people of color, women, and
veterans than traditional 7(a) loans.
This is a proven model, and we can see further evidence in the
response to the COVID-19 pandemic. When the Paycheck Protection
Program, or PPP, first launched at the start of April, traditional
lenders prioritized their largest and longstanding clients, making it
difficult for underserved businesses to even submit an application for
assistance.
To address this problem, Congress established a set-aside lending
authority for community financial institutions like certified
development companies, microloan intermediaries, and community
development financial institutions, many of which are already certified
Community Advantage lenders. The result was a success, as these
nontraditional lenders were able to reach the underserved businesses
and, together, deliver over 141,000 PPP loans totaling more than $8.5
billion.
Now it is time to build on that success. This legislation before us
today includes measures, with bipartisan agreement, to make the program
even stronger. It will expand the definition of ``underserved
businesses'' to explicitly include those owned by people of color and
those located in declared disaster areas, and it will increase the
percentage of loans that lenders must make in underserved markets from
60 to 75 percent of their portfolios. It will also allow SBA to make
loans up to $350,000 on a case-by-case basis.
With these improvements and the long-term certainty afforded by
statutory authorization, this bill will make the Community Advantage
program an even more powerful tool for closing the credit gap and
delivering affordable capital to more small businesses.
With a long and arduous economic recovery before us, this bill will
help countless small businesses rebuild, and it will help them to start
anew as we recover from the coronavirus pandemic.
Mr. Speaker, I thank Congressman Spano for his partnership and
Chairwoman Velazquez and Ranking Member Chabot for their strong
support. I also thank the Community Advantage lenders and borrowers
whose success and testimony over the years have powerfully made the
case for Congress to pass this legislation to authorize the program.
Mr. Speaker, I urge my colleagues to vote ``yes'' on H.R. 7903.
Mr. CHABOT. Mr. Speaker, I yield such time as he may consume to the
gentleman from Florida (Mr. Spano).
Mr. Speaker, I thank the gentleman for his service in this body. He
has introduced and supported a number of pieces of legislation and has
worked very hard in his leadership position as ranking member of the
Oversight, Investigations and Regulations Subcommittee. I thank him for
his service here.
Mr. SPANO. Mr. Speaker, I thank the gentleman from Ohio (Mr. Chabot)
for those kind comments. I appreciate that very much.
I rise today in support of a bill I am proud to sponsor, H.R. 7903,
legislation to improve and authorize the SBA's Community Advantage Loan
Program.
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Small businesses are the driver of our communities, and now, more
than ever, it is imperative for Congress to support them.
In my home State of Florida, there are over 2.5 million small
businesses employing over 3.5 million Floridians.
As a former small business owner myself and as someone who will be a
small business owner again very, very soon, I understand the sacrifice
many small business owners make to keep their doors open and to meet
their payrolls. I know the challenges that they face and the grit that
it takes for them to persevere and the impact that they have on our
communities.
Among these challenges for many small businesses is acquiring the
capital that is necessary to finance their operations.
Many of the tools available at the SBA strive to increase access to
capital for small businesses that are unable to receive it through
conventional and traditional lending markets. One of these tools to
support small businesses is the SBA's Community Advantage Loan Program,
which was launched as a pilot program to assist small businesses in
historically underserved and rural areas. It targets assistance to
veteran-owned businesses, women-owned businesses, startups, and
underserved minority communities, all key job creators. The combination
of financial and technical assistance has made the program a proven
game changer for many small businesses.
Mr. Speaker, I thank the gentlewoman from California (Ms. Judy Chu)
for her bipartisan leadership in providing strategic improvements to
this program and to move it from a pilot program to an authorized
program for the next 5 years.
The improvements included in H.R. 7903 will ensure the program serves
businesses truly in need of SBA services. Specifically, H.R. 7903
defines the program with congressional intent. It outlines how
Community Advantage lenders must operate within the program and details
loan terms and other requirements.
Mr. Speaker, I also thank the chairwoman and the ranking member for
advancing this important legislation that will strengthen and improve
the Community Advantage Loan Program.
Mr. Speaker, I urge my colleagues to support the bill.
Mr. CHABOT. Mr. Speaker, this is a good bill that deserves our
support. The SBA's Community Advantage program provides both financial
and technical assistance to our Nation's smallest firms. It is a great
program that has proven results.
Mr. Speaker, I urge my colleagues to support this bill, and I yield
back the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, in almost a decade, Community Advantage
lenders have delivered over $770 million in affordable capital to
underserved small businesses across America, assisting women- and
minority-owned businesses that have historically struggled to secure
affordable capital through traditional means, yet new lenders are
hesitant to participate because of its pilot status and frequently
changing rules.
Today's bill will remedy these problems and ultimately grow the CA
program to deliver more capital to entrepreneurs who need access to
affordable capital the most, especially those severely impacted by the
COVID-19 pandemic.
Mr. Speaker, I applaud the work by the gentlewoman from California
(Ms. Judy Chu) and the gentleman from Florida (Mr. Spano) for their
efforts in crafting a bipartisan bill to codify the Community Advantage
program.
Mr. Speaker, I encourage all my colleagues to vote ``yes,'' and I
yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from New York (Ms. Velazquez) that the House suspend the
rules and pass the bill, H.R. 7903, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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