[Congressional Record (Bound Edition), Volume 145 (1999), Part 13]
[House]
[Pages 18923-18927]
[From the U.S. Government Publishing Office, www.gpo.gov]



 AMENDING SMALL BUSINESS ACT TO MAKE IMPROVEMENTS IN GENERAL BUSINESS 
                              LOAN PROGRAM

  Mr. TALENT. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 2615) to amend the Small Business Act to make improvements 
to the general business loan program, and for other purposes.
  The Clerk read as follows:

                               H.R. 2615

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. LEVELS OF PARTICIPATION.

       Section 7(a)(2)(A) of the Small Business Act (15 U.S.C. 
     636(a)(2)(A)) is amended--
       (1) in paragraph (i) by striking ``$100,000'' and inserting 
     ``$150,000''; and
       (2) in paragraph (ii) by striking ``$100,000'' and 
     inserting ``$150,000''.

     SEC. 2. LOAN AMOUNTS.

       Section 7(a)(3)(A) of the Small Business Act (15 U.S.C. 
     636(a)(3)(A)) is amended by striking ``$750,000,'' and 
     inserting, ``$1,000,000 (or if the gross loan amount would 
     exceed $2,000,000),''.

     SEC. 3. INTEREST ON DEFAULTED LOANS.

       Subparagraph (B) of section 7(a)(4) of the Small Business 
     Act (15 U.S.C. 636(a)(4)) is amended by adding at the end the 
     following:
       ``(iii) Applicability.--Clauses (i) and (ii) shall not 
     apply to loans made on or after October 1, 1999.''.

     SEC. 4. PREPAYMENT OF LOANS.

       (a) In General.--Section 7(a)(4) of the Small Business Act 
     (15 U.S.C. 636(a)(4)) is amended--
       (1) by striking ``(4) Interest rates and fees.--'' and 
     inserting ``(4) Interest rates and prepayment charges.--''; 
     and
       (2) by adding at the end the following:
       ``(C) Prepayment charges.--
       ``(i) In general.--A borrower who prepays any loan 
     guaranteed under this subsection shall remit to the 
     Administration a subsidy recoupment fee calculated in 
     accordance with clause (ii) if--

       ``(I) the loan is for a term of not less than 15 years;
       ``(II) the prepayment is voluntary;
       ``(III) the amount of prepayment in any calendar year is 
     more than 25 percent of the outstanding balance of the loan; 
     and
       ``(IV) the prepayment is made within the first 3 years 
     after disbursement of the loan proceeds.

       ``(ii) Subsidy recoupment fee.--The subsidy recoupment fee 
     charged under clause (i) shall be--

       ``(I) 5% of the amount of prepayment, if the borrower 
     prepays during the first year after disbursement;
       ``(II) 3% of the amount of prepayment, if the borrower 
     prepays during the 2nd year after disbursement; and
       ``(III) 1% of the amount of prepayment, if the borrower 
     prepays during the 3rd year after disbursement.''.

     SEC. 5. GUARANTEE FEES.

       Section 7(a)(18)(B) of the Small Business Act (15 U.S.C. 
     636(a)(18)(B)) is amended to read as follows:
       ``(B) Exception for certain loans.--
       ``(i) In general.--Notwithstanding subparagraph (A), if the 
     total deferred participation share of a loan guaranteed under 
     this subsection is less than or equal to $120,000, the 
     guarantee fee collected under subparagraph (A) shall be in an 
     amount equal to 2 percent of the total deferred participation 
     share of the loan.
       ``(ii) Retention of fees.--Lenders participating in the 
     programs established under this subsection may retain not 
     more than 25 percent of the fee collected in accordance with 
     this subparagraph with respect to any loan not exceeding 
     $150,000 in gross loan amount.''.

     SEC. 6. LEASE TERMS.

       Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) 
     is further amended by adding at the end the following:
       ``(28) Leasing.--In addition to such other lease 
     arrangements as may be authorized by the Administration, a 
     borrower may permanently lease to 1 or more tenants not more 
     than 20 percent of any property constructed with the proceeds 
     of a loan guaranteed under this subsection, if the borrower 
     permanently occupies and uses not less than 60 percent of the 
     total business space in the property.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Missouri (Mr. Talent) and the gentleman from Illinois (Mr. Manzullo), 
as a Member opposed to the bill, each will control 20 minutes.
  The Chair recognizes the gentleman from Missouri (Mr. Talent).
  Ms. VELAZQUEZ. Mr. Speaker, I ask unanimous consent that the time in 
support of H.R. 2615 be equally divided between myself and the 
gentleman from Missouri (Mr.  Talent).
  Mr. TALENT. Mr. Speaker, reserving the right to object, and I will 
not object, I would just join the gentlewoman in her unanimous consent 
request.
  Mr. Speaker, I withdraw my reservation of objection.
  The SPEAKER pro tempore. Does the gentleman from Missouri (Mr. 
Talent) seek to yield half his time to the gentlewoman from New York 
(Ms. Velazquez)?
  Mr. TALENT. Yes, Mr. Speaker. It was my intention to yield the time 
to the gentlewoman, and I join her in her unanimous consent request.
  The SPEAKER pro tempore. The Chair understands the 20 minutes in 
favor of the bill will be divided equally, so that the gentleman from 
Missouri (Mr. Talent) has 10 minutes and the gentlewoman from New York 
(Ms. Velazquez) has 10 minutes.
  Without objection, the gentleman from Missouri (Mr.  Talent) is 
recognized.
  There was no objection.
  Mr. TALENT. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in strong support of H.R. 2615, a bill to amend 
the Section 7(a) loan program at the Small Business Administration. I 
want to start by thanking my colleague, the gentlewoman from New York 
(Ms. Velazquez), the ranking Democrat on the committee, for her 
assistance in crafting this bill. Her help has been invaluable, and I 
thank her on behalf of myself and the small business community as a 
whole.
  Mr. Speaker, the 7(a) general business loan program provides over $9 
billion of financial assistance to small businesses every year. The 
bill before us, H.R. 2615, will improve this program and make it more 
responsive to the needs of small businesses.
  Allow me to briefly describe the proposed changes to the 7(a) program 
contained in H.R. 2615. First, the maximum guarantee amount of a 7(a) 
loan program is increased to $1 million from the 1988 limit of $750,000 
in order to keep pace with inflation. In fact, Mr. Speaker, to fully 
keep pace with inflation, the maximum guarantee amount should be 
increased to approximately $1,250,000. The committee believes a simple 
increase to $1 million is sufficient and has not gone further.
  Second, H.R. 2615 removes a provision which reduced SBA's liability 
for accrued interest on defaulted loans since the provision's intended 
savings have failed to materialize.
  The third change to the 7(a) program concerns the problem of early 
repayment of large loans, which is jeopardizing the subsidy rate 
supporting the program. H.R. 2615 will remedy this

[[Page 18924]]

problem by assessing the fee to the borrower for prepayment of any loan 
with a term in excess of 15 years within the first 3 years after 
disbursement.
  The committee believes this increase in prepayments is due to a 
variety of factors. There have been some instances of misuse by the 
program by businesses seeking bridge financing. There have also been 
cases where, due to the strong economy, lenders have approached 
borrowers offering improved terms, effectively skimming loans, and 
avoiding the need to process credit analyses. This removes 
authorization dollars from the program which could have been used for 
other loans and is a disservice to both the small business borrowers 
and the 7(a) lenders. Both parties work to put financing packages 
together at the cost of both time and money.
  H.R. 2615 also includes three changes designed to encourage the 
making of smaller loans. The 80 percent guarantee rate will be expanded 
from loans under $100,000 to loans under $150,000. Likewise, the 2 
percent guarantee fee will now apply to loans up to $150,000. That 
represents a significant savings for these small borrowers.
  Finally, for small loans we have included a provision allowing 
lenders to retain one quarter of the guarantee fee on loans under 
$150,000 as an incentive to make these loans.
  These changes add to the innovations that Congress has introduced 
over the past several years concerning the availability of loans at the 
lower end of the 7(a) spectrum. As a result, since 1994, the number of 
loans made under $100,000 significantly. In 1998 alone, 53 percent of 
the 7(a) loans were under 100,000. This compares with only 37 percent 
in 1994. The figure fluctuates, Mr. Speaker, but the general trend is 
definitely in the direction of smaller loans.
  Finally, H.R. 2615 modifies current 7(a) program rules prohibiting 
loans from passive investments. When Congress last reauthorized the 
program, we modified a similar restriction in the 504 program in order 
to permit the financing of projects where less than 20 percent of a 
business space will be rented out when the small business borrower in 
question will occupy the remaining space. It is time we provides 
similar options to 7(a) borrowers.
  Mr. Speaker, H.R. 2615 is a common sense bill designed to improve the 
financial assistance provided to small businesses, particularly the 
smallest of small businesses, and I urge my colleagues to support it.
  Mr. Speaker, I reserve the balance of my time.
  Mr. MANZULLO. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I am grateful to the chairman of the Committee on Small 
Business and the ranking member, and I agree with six-sevenths of the 
bill. So that is pretty good. My colleagues may say, well, if the 
gentleman agrees with six-sevenths of the bill, should that not be 
enough? Normally, under most circumstances, I would say yes, but in its 
current form, I rise in opposition to the bill and, therefore, will 
vote against it.
  We should not rush to pass this bill under suspension of the rules 
until we actually have more information from the SBA. I realize most of 
my colleagues are not versed on the different programs run by the SBA. 
The SBA has two main loan programs, the 7(a) program and the 504 
program. 7(a) mainly provides start-up capital for new entrepreneurs, 
while the 504 program is designed to meet the capital needs of growing 
small businesses for expansion or purchases of additional equipment.
  We just passed, with my concurrence, H.R. 2614, which increased the 
maximum loan guarantee amount in the 504 loan program from $750,000 to 
$1 million. I agree with that because growing small businesses already 
in existence have greater capital needs. In addition, the 504 loan 
program operates at no cost to the taxpayer because the fees it charges 
offset its costs. However, H.R. 2615 plans to do the same thing for the 
7(a) loan program and I disagree with this policy change.
  No one should start up a small business with a $1 million loan backed 
by the SBA. If a bank needs a 75 percent government-backed guarantee to 
feel comfortable with a $1 million loan, then we should think twice 
before passing the bill. If someone requires a $1 million loan for 
start-up, they are probably buying a lot of new equipment and large 
amounts of real estate. They should rethink their business plan because 
this is a recipe for failure and the taxpayers will be left paying off 
the default.
  If a loan is for an already existing small business, then the bank 
should make these loans on a sound commercial basis without having to 
rely upon the crutch of the taxpayer. These companies already have a 
financial track record. It should be on the merits, not an SBA 
guarantee, that the bank should make the loans.
  If a borrower still needs government backing for an expansion 
project, then they should turn to the 504 loan program. The 504 program 
should serve capital expansion needs, not the 7(a) loan program.
  The question essentially is this: At what point should companies be 
weaned off government guaranteed loans; 1 year, 2 years, 5 years, 10 
years, 20 years?
  If the purpose of the Small Business Administration is to give a 
jump-start to companies that otherwise would not be able to start up a 
business, then why are we increasing the amount of start-up capital 
available to them from $750,000 to $1 million? We should be keeping it 
the same and encouraging companies to get off the government help.
  It stands to reason that if the SBA has an overall fixed amount of 
total loans it can support, then throughout the year, as small business 
owners are able to borrower larger amounts, then the overall loan 
volume will decrease, to the detriment of the number of small 
borrowers.
  This is what is really confusing. The SBA maintained, for the longest 
period of time, and sent a memo to my office which they have never 
corrected in writing, that if the authorization level were kept the 
same, which it is, but the level of 7(a) loans went from $750,000 to $1 
million, then in excess of 6,000 entrepreneurs, who otherwise would be 
applying for and qualifying for small business loans, would be left out 
because the bigger borrowers would be in there taking up all the money.
  That was SBA's position for the longest period of time until they 
mysteriously, and without any empirical evidence, suddenly changed 
their mind and said that the small business incentives in the small 
business bill means there would be a net loss of people receiving 
loans.
  We have to think about that. This bill has a small business incentive 
in the Small Business Administration loan program.

                              {time}  1615

  So now we are in the process of defining a small business within a 
small business to give incentives to small businesses within the small 
business loan program.
  It makes us wonder why we even have the program in the first place. 
But it is here. And if it is here, then it should not be abused. And if 
it is here and the money is available, it should be available for the 
small entrepreneurs, not the people who can borrow up to $1 million.
  The cost implications in the bill are still not clear. H.R. 2615 
contains much-needed incentives to encourage the banks to make the 
smaller loans. And there we are.
  Now, we have got a system not of set-asides but a system somehow 
built into language that says the Small Business Administration should 
prefer small businesses.
  I want the Members of Congress and the Speaker to think about that 
statement. If we are encouraging small business loans within the Small 
Business Administration, then I think that we have an agency now that 
has lost its mission when it starts dividing up what exactly is a small 
business.
  When H.R. 2615 was marked up in committee, the sponsors of the bill 
readily admitted that any additional revenue that may be raised with 
the fees charged to higher dollar loan borrowers will be used to pay 
for the small loan incentive contained in the bill. Thus, the impact on 
most expensive items in the SBA budget supposedly

[[Page 18925]]

would be a wash at best. But we have no empirical data, nothing, that 
has been furnished to this Member of Congress, who requested the SBA 
first of all to come to an analysis as to the loss of businesses that 
would be deprived of start-up capital; and they, on their own, advised 
this Member of Congress that it would be in excess of 6,000.
  Later on they changed their mind, but they told the press still that 
the information given to this Member of Congress was correct.
  Therefore, I can come to one conclusion, and that is that the Small 
Business Administration itself does not understand the mechanics of 
this bill. And if they do not understand the mechanics of this bill and 
they do not understand the wording of it and they do not understand the 
impact of it, then this bill should not pass, it should come up under 
regular order and be subject to an amendment.
  I urge my colleagues to reject the bill now and send it back to 
committee. Once we have a more clear understanding of how this bill 
will impact the budget and small loan borrowers, then we can always act 
on this provision. We do not have the information yet.
  There is plenty of time to work on this legislation. An additional 
hike in the maximum guarantee amount of the 7(a) loan program can be 
included in the regular SBA authorization bill. It would be easy to 
bring it up at a later time. We can mark up a separate bill later this 
fall. But I do not see the reason for rushing to action on this now 
when we have incomplete information.
  Thus, I respectfully disagree with my chairman and ranking minority 
member and ask that H.R. 2615 be defeated in its current form.
  This is the only alternative left to me because I cannot amend the 
bill under suspension of the rules. The rest of the bill is fine.
  Mr. Speaker, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise in strong support of H.R. 2615, legislation to 
improve and update the General Business Loan Guaranty, or 7(a), 
program.
  With the passage of today's legislation, we will grow the 7(a) loan 
program in a reasonable and thoughtful way that expands the program, 
while continuing our commitment to those businesses that need access to 
start-up capital.
  Although SBA administers numerous programs that provide financial and 
technical assistance to small firms, the 7(a) program is the agency's 
flagship loan program. It is far and away the agency's largest and most 
important both in terms of numbers of loans and program level 
supported.
  Under 7(a), loan guarantees are provided to eligible small businesses 
that have been unsuccessful in obtaining private financing on 
reasonable terms. The proceeds from a 7(a) loan may be used for 
virtually any business purpose and have made the difference for 
countless entrepreneurs.
  Under a 7(a) partnership between Government and nearly 7,000 banks 
and non-bank lenders that participate, small businesses are ensured the 
access to capital they need. Since the program's inception, more than 
600,000 7(a) loans totaling $80 billion have been made to help this 
Nation's small businesses.
  One of the important items in this legislation is the increase in the 
loan guarantee from $750,000 to $1 million. It has been over a decade 
since we increased the loan guarantee. As a matter of fact, if we were 
to index the current guarantee using the Consumer Price Index, we would 
actually have a loan guarantee that is higher than what is under 
consideration today.
  I believe what we are doing is reasonable and necessary if the 
program is to continue to serve our Nation's small businesses.
  To safeguard against the risk that increasing the guarantee will harm 
those seeking smaller loans, we have capped the total loan amount that 
can be made under the 7(a) program at $2 million. This is in 
combination with other provisions of the legislation that will ensure 
that the 7(a) program will be available to all who need it.
  I would also like to voice my strong support for the small loan 
provisions contained in this legislation. The committee has made sure 
that small loans are still a priority by adopting such changes as 
reducing the program's cost to the borrower of loans of $150,000 or 
less from three percent of the loan to two percent, making certain that 
small businesses will keep more of their money.
  We are also creating incentives for lenders to continue to make small 
loans by giving those lenders additional funds guaranteed by the SBA 
through an increasing guarantee from 75 percent to 80 percent and a 
rebate that could be as high as $600 per loan.
  These proposals will ensure that the program continues its mission. 
If the 7(a) program is going to continue to serve this Nation's small 
businesses, it must keep in step with the changing financial landscape.
  The changes made by H.R. 2615 create a balanced approach that updates 
the 7(a) program while affirming our commitment to small businesses 
that small loans are still accessible. I urge my colleagues to support 
H.R. 2615.
  I just would like to take a moment to respond to the points made by 
the gentleman from Illinois (Mr. Manzullo).
  I am just as concerned that we continue our commitment to small loans 
to address this. To address this, the committee has placed several 
provisions aimed at encouraging small loans. These provisions offer 
incentives for 7(a) lenders to continue to make smaller loans, 
especially loans under $150,000.
  These incentives include the increase in the loan guarantee amount 
from 75 to 80 percent for loans under $150,000 in section 1; the 
reduction of borrower's fees from three percent to two percent on loans 
up to $120,000 in section 5; and the fee-splitting provision in section 
5 that will allow up to 25 percent of the borrower's fees on loans 
under $150,000 to go to the 7(a) lenders rather than to SBA.
  Without the increase in the loan guarantee that pays for these 
incentives, we will be faced with a choice, either increase the 
program's subsidy rate, which will require additional funds are 
appropriated, and given the current state of the Commerce-Justice-State 
appropriations bill we will consider this week, that is unlikely; or 
eliminate these important small business loan provisions. And I believe 
that that will be short-sighted.
  Mr. Speaker, I reserve the balance of my time.
  Mr. TALENT. Mr. Speaker, may I inquire how much time I have 
remaining?
  The SPEAKER pro tempore (Mr. Miller of Florida). The gentleman from 
Missouri (Mr. Talent) has 6\1/2\ minutes remaining.
  Mr. TALENT. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, the jurisdiction of the small business community, the 
legislative jurisdiction of it, is really only over the Small Business 
Administration and its programs.
  Since I became chairman, I have tried to use the oversight 
jurisdiction of the committee, which is much broader, to struggle for 
tax and regulatory relief for small businesses around the country. And 
that is really what we devote a whole lot of our time to on the 
committee. But we do take seriously the job of overseeing the programs 
in the Small Business Administration.
  In order to accomplish that, we periodically work together on a 
bipartisan basis and we pass bills designed to update the network of 
statutes that on the basis of which those loan programs run. I have 
tried to push them in the direction in my chairmanship and with the 
support first of the gentleman from New York (Mr. LaFalce) and then of 
the gentlewoman from New York (Ms. Velazquez) in the direction of 
making those programs more efficient and making them run as entirely 
private lending programs do whenever we can.
  This bill is part of that trend. It contains a number of different 
provisions which are important to achieving that effort.
  We have worked together on a bipartisan basis. We produced the bill 
by a

[[Page 18926]]

24-4 vote in the committee. I ask the House to support us in these 
efforts. This is important to the people who rely on these programs and 
administer these programs and important to what we are trying to 
accomplish on the committee.
  The gentleman from Illinois said correctly, I think, that he agrees 
with six-sevenths of the bill. I say it might be even more than that. 
The only dispute is a provision that, in the view of the gentleman, 
pushes the portfolio away from the direction of smaller loans.
  First of all, Mr. Speaker, there is no question and I do not think 
the gentleman would deny that, on balance, this bill continues the 
trend of moving the 7(a) portfolio in the direction of smaller loans.
  First of all, the bill caps the total size of any guaranteed loan at 
$2 million. So a lender cannot issue a 7(a) loan or make a 7(a) loan 
for more than $2 million. There has been no statutory cap on loan size.
  The bill allows lenders to retain a somewhat greater percentage of 
fees that are paid when they make smaller loans, and the bill increases 
guarantee rates for smaller loans. So there is no question that this 
bill will continue prudently pushing the portfolio in the direction of 
smaller loans.
  The sole dispute is over one small provision in this bill which 
allows the total amount of the guaranteed loan to go up from $750,000 
to $1 million. In other words, the portion that the Government 
guarantees of any loan is now at $750,000. If this bill passes and the 
President signs it, it will be $1 million.
  The reason we do that, Mr. Speaker, is that amount has not been 
adjusted for inflation for 11 years. It was made $750,000 in 1988 I 
believe. We have not changed it at all. We have made a modest 
adjustment that does not even keep pace with inflation. It is the only 
part of this bill that is in issue.
  To be perfectly frank, I simply do not see why it is that big a deal. 
We felt it was important to do it because, without some aspect of this 
portfolio being somewhat larger loans, it tends to undermine the 
stability and the financial prudence of the portfolio as a whole.
  We want to push it in the direction of the smaller loans. But if we 
go too far and too fast, we yank out of the portfolio the somewhat 
larger loans which really support the whole 7(a) portfolio. And we do 
not want to do that. That could result in a lot more defaults and a lot 
more money that we have to find out of the general revenue in order to 
support this program.
  Again, Mr. Speaker, I respect the gentleman from Illinois (Mr. 
Manzullo). He and I have worked together on our time on the committee 
together. I respect the sincerity of his view here.
  I would say it is a small part of this bill. I am happy to work with 
the gentleman as we go through the process over in the Senate and then 
in conference. But I hope we can have the confidence of the House in 
supporting this bill.
  It came out of the committee by an overwhelming majority. It may be 
housekeeping to most of the House. It is important to these programs. 
We try to do a responsible, bipartisan job on the Committee on Small 
Business. The ranking member and I are in full agreement, as was the 
overwhelming majority of the committee.
  Again, I ask the House for its supports. We will continue working on 
this issue as we move through the process.
  Mr. Speaker, I reserve the balance of my time.
  Mr. MANZULLO. Mr. Speaker, may I inquire of the Chair the amount of 
time that I have remaining?
  The SPEAKER pro tempore. The gentleman from Illinois (Mr. Manzullo) 
has 12 minutes remaining.
  Mr. MANZULLO. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, first of all, I want to concur with the statements of 
the chairman of the Committee on Small Business, who has done a 
tremendous effort in turning the Committee on Small Business into a 
committee that has been very responsive, listening to the needs and the 
desires of the people across this Nation.
  I chair the Subcommittee on Small Business, Tax, and Trade. I have 
seen the chairman conduct other hearings, and I know that he has the 
small business person at heart. In fact, when he practiced law before 
he came to this body, it was as a person involved in small business and 
he knows the needs of the small business community intimately well.
  I would only suggest to the chairman of the Committee on Small 
Business, my friend the gentleman from Missouri (Mr. Talent) this fact: 
With the increase of the loan amounts from $750,000 to $1 million, 
financially there is less money in the overall pot. Because there has 
been no increase in the authorization.

                              {time}  1630

  As the gentlewoman from New York (Ms. Velazquez) says, there is 
little opportunity, little likelihood that there would be an increase 
in the authorization. Simply based upon the fact that there is less 
money in the pot, who is going to be the recipient of not getting the 
money? Is it going to be the little guy, or the people who have the 
attorneys and the CPAs and the bankers that can increase their amounts 
from $750,000 to $1 million? That begs the basic question as to what 
the purpose of the Small Business Administration is.
  I am trying the best I can to preserve some type of mission that the 
SBA has. We have absolutely no empirical data, nothing to refute the 
original data that the SBA gave me, nothing in writing, no words from 
the SBA, nothing from either of the speakers here to refute the fact 
that the memo they gave me stated unequivocally and in concurrence with 
Mr. Hocker who testified at the Small Business hearing that unless the 
authorization were increased, the fact that we are increasing the 
amount that could be borrowed from $750,000 to $1 million means that in 
excess of 6,000 small businesspeople who otherwise would qualify for an 
SBA loan will be excluded from the process. To aggravate that, in the 
past 3 years, as the amount of SBA loans go up, the number of small 
business recipients goes down and the number of small businesspeople 
receiving the loan has now dropped to about 53 percent of the total, 
meaning that the larger applicants are getting the lion's share of the 
money and that is the dangerous trend. I am trying to stop that.
  Is it worth objecting to an entire bill because you are opposed to 
one-seventh of the bill? The answer is yes. The name of the bill is 
small business. Does anybody think that borrowing $1 million today is 
small business? It could be, but if it is of that magnitude, then the 
bank should be willing to kick in the extra amount and to guarantee the 
extra amount, not put it upon the shoulders of the taxpayers to say we 
want you to guarantee up to $1 million. If you are solvent enough to 
borrow $750,000 with an SBA guarantee, then the banks themselves should 
be willing to loan the rest of the amount of money based upon their own 
private arrangement with the borrower. It is just that simple.
  Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may 
consume.
  I would just like to echo the comments made by the gentleman from 
Missouri. You have to continue updating a program. What works in the 
1980s does not necessarily work in the 1990s. No bank would allow its 
loan program to go a decade without updating it. If we are going to 
make SBA a cutting edge financial institution of the 21st century, we 
must continue to improve these programs. It just makes sense.
  Mr. Speaker, I yield back the balance of my time.
  Mr. TALENT. Mr. Speaker, I yield myself such time as I may consume.
  Let me repeat again both my friendship and my respect for the passion 
and the commitment of the gentleman from Illinois to small business. He 
and I have talked over this issue. We had a full debate over it in 
committee. I do want to continue working with him as this bill goes 
through the process. I do want to emphasize the importance to Members 
of the House who may not, and I certainly could not blame them if they 
were not familiar with the ins and outs of all these programs, but I 
hope

[[Page 18927]]

they will understand that these programs are important, that the 
committee does oversee them and that it is important that we move this 
legislation through to make all the different corrections that are in 
there.
  So I would ask of the House, let us get this bill out and get it in 
conference. I pledge to continue working with the gentleman. It is a 
small part of the bill over which we have a disagreement. There is no 
question that the bill as a whole moves in the direction of pushing the 
portfolio gently towards smaller loans. I like that. We have worked for 
that under my chairmanship. He have worked for that with the ranking 
member. This is a modest inflationary update. I would hope that we 
would have the House's confidence in being able to make it and that we 
can move this bill through.
  I would urge the House to support H.R. 2615.
  Mr. MANZULLO. Mr. Speaker, will the gentleman yield?
  Mr. TALENT. I yield to the gentleman from Illinois.
  Mr. MANZULLO. Based upon the gentleman's assertions that he is 
willing to continue discussing this figure of $750,000 increased to $1 
million, I would still be opposed to the bill, I will vote ``no'' on an 
oral vote but not call for a recorded vote.
  Mr. TALENT. Reclaiming my time, I appreciate very much the 
gentleman's most gracious concession in that regard. I certainly will 
be glad to keep working with him. He and I disagree on this. My major 
concern is making sure that we have a proper balance in the portfolio 
so that we do not have the unintended impact of undermining the 
stability of the smaller loans that we do make by not allowing this 
minor inflationary update. But perhaps we can provide for that in some 
other context. I am happy to work with the gentleman in that regard.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Miller of Florida). The question is on 
the motion offered by the gentleman from Missouri (Mr. Talent) that the 
House suspend the rules and pass the bill, H.R. 2615.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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