[Congressional Record (Bound Edition), Volume 151 (2005), Part 8]
[Extensions of Remarks]
[Page 11380]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  SBA MICROENTERPRISE IMPROVEMENT ACT

                                 ______
                                 

                           HON. BOBBY L. RUSH

                              of illinois

                    in the house of representatives

                        Wednesday, May 25, 2005

  Mr. RUSH. Mr. Speaker, I rise today to introduce the ``SBA 
Microenterprise Improvement Act''. This act would revise the 
eligibility for microloan intermediaries, increase the maximum 
microloan small loan amount from $7500 to $10,000, increase technical 
assistance contracting to 30 percent, adjust the term limit for loans, 
and create reporting requirements that will highlight the successes of 
public-private partnerships.
  This bill will also provide several improvements to the ``Program for 
Investment in Microentrepreneurs Act of 1999'', also known as the PRIME 
Act, a bill that I introduced in 1999 to help disadvantaged 
microentreprenuers obtain technical and training assistance.
  The SBA Microloan and the Program for Investment in 
Microentrepreneurs (PRIME) are unique from other SBA programs because 
they combine training and technical assistance with loan capital. These 
programs serve small businesses without access to loans through 
conventional means because they lack business experience, collateral, 
or the credit scores needed. Loans that are very small are unprofitable 
for banks to service and often are not available in rural or low income 
communities.
  The combination of technical support and small loans has made these 
programs the most successful in the SBA portfolio. In FY2004 the 
default rate was five hundredths of one percent even though the loans 
were made to the riskiest category of borrowers. Microloan programs 
create jobs that stay in the community, which is very important these 
days as we hear of increased off-shore movements by large corporations 
to remain competitive worldwide. With most small businesses 
participating in this program employing less than five people the cost 
for job creation in the microloan program averages approximately $3000 
per employee which is eight times less than SBA's stated goal of 
creating one job for every $23,000 loaned through the 7(a) program.
  The ``SBA Microenterprise Improvement Act'' also amends the Riegle 
Community Development and Regulatory Improvement Act of 1994 to extend 
the program to disadvantaged Native American entrepreneurs and 
prospective entrepreneurs by providing 2 million dollars annually over 
the next three years for loans and training programs.
  I believe that the SBA Microloan and the Program for Investment in 
Microentrepreneurs has proven that it can help unbankable small 
business owners with intensive technical assistance; training and small 
loans to succeed financially and become important service providers in 
our communities. I hope that all my colleagues will join me in 
supporting ``The SBA Microenterprise Improvements Act'' legislation.

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