[Congressional Record (Bound Edition), Volume 156 (2010), Part 4]
[House]
[Pages 5121-5123]
[From the U.S. Government Publishing Office, www.gpo.gov]




          EXTENDING THE SMALL BUSINESS LOAN GUARANTEE PROGRAM

  Mr. SERRANO. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 4938) to permit the use of previously appropriated funds to 
extend the Small Business Loan Guarantee Program, and for other 
purposes.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 4938

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

     SECTION 1. EXTENSION OF SMALL BUSINESS LOAN GUARANTEE 
                   PROGRAM.

       (a) Authority To Use Funds.--Up to $40,000,000 of the 
     amount made available under the heading ``Small Business 
     Administration--Business Loans Program Account'' in title V 
     of division C of the Consolidated Appropriations Act, 2010 
     (Public Law 111-117) also may be utilized for fee reductions 
     and eliminations under section 501 of title V of division A 
     of the American Recovery and Reinvestment Act of 2009 (Public 
     Law 111-5) and for the cost of guaranteed loans under section 
     502 of such title. Such costs, including the cost of 
     modifying such loans, shall be as defined in section 502 of 
     the Congressional Budget Act of 1974.
       (b) Extension of Sunset Date.--Section 502(f) of title V of 
     division A of the American Recovery and Reinvestment Act of 
     2009 (Public Law 111-5) is amended by striking ``March 28, 
     2010'' and inserting ``April 30, 2010''.
  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
York (Mr. Serrano) and the gentlewoman from Missouri (Mrs. Emerson) 
each will control 20 minutes.
  The Chair recognizes the gentleman from New York.

                              {time}  1645


                             General Leave

  Mr. SERRANO. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days to revise and extend their remarks on H.R. 
4938.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New York?
  There was no objection.
  Mr. SERRANO. I yield myself as much time as I may consume.
  Mr. Speaker, the bill before us provides for a 1-month extension of 
the Recovery Act small business lending program and provides an 
additional $40 million for this program. Through March 12 of this year, 
the small business lending program has supported nearly $23 billion in 
small business lending which helped create or retain over 560,000 jobs. 
The program eliminated the fees that borrowers and certain lenders are 
normally charged for loans through the Small Business Administration's 
7(a) and 504 loan programs. The Recovery Act also increased the 
government's guarantees on the 7(a) loans from 75 percent to 90 
percent.
  Mr. Speaker, 7(a) is the SBA's primary program for helping startup 
and existing small businesses with financing guaranteed for a variety 
of general business purposes. SBA does not make loans itself but rather 
guarantees loans made by participating private lending institutions. 
Like most commercial loans, these loans are typically variable rate.
  The 504 program provides growing businesses with long-term, fixed-
rate financing for major fixed assets, such as land and buildings, 
through Certified Development Companies. A Certified Development 
Company, CDC, is a private, nonprofit corporation set up to contribute 
to the economic development of the community it serves.

[[Page 5122]]

  When credit markets froze in late 2008, credit markets that service 
small businesses froze as well and have continued to be hard hit. These 
provisions have been working to loosen up the credit market for small 
businesses so they can stay in business, keep people employed, and make 
new hires.
  As we know, in a very bipartisan way, we have all felt that there is 
nothing more important we could do right now but to allow for small 
businesses to thrive as we move to create jobs in our economy. And so I 
would hope that everybody in a unanimous fashion, Mr. Speaker, can 
support this bill.
  I reserve the balance of my time.
  Mrs. EMERSON. Mr. Speaker, I yield myself such time as I may consume.
  All Members, all of us, have been hearing from our constituents that 
banks are not lending to small businesses. The Financial Services 
Appropriations Subcommittee has heard testimony that this is the result 
of banks' unwillingness to take risks or reduce their capital reserves. 
In addition, bank regulators have increased scrutiny on lending 
practices. The funding and language included in this bill attempts to 
address this problem by increasing the SBA loan guarantee to 90 percent 
for certain small business loans and eliminating, as the chairman said, 
certain borrower fees associated with SBA's business loans. I greatly 
appreciate that my chairman, Jose Serrano, has not increased spending 
in this bill but is allowing SBA to use other available resources to 
continue funding these programs.
  With unemployment at almost 10 percent, now is not the time to make 
it harder for small businesses to get credit, and these programs should 
and must be continued. However, I have to say that I am a bit troubled 
with the manner in which this bill is being considered. Just yesterday, 
the House passed the Disaster Relief and Summer Jobs Act that includes 
funding and language to continue these SBA programs through April. So 
my question is, which bill does the majority intend the Senate to act 
on? If yesterday's bill was not so controversial, perhaps today's bill 
would not be necessary.
  Neither the disaster bill nor the SBA bill was marked up by the 
Appropriations Committee. The majority did not seek input from the 
minority in either of these bills. We've known since the enactment of 
the stimulus bill over a year ago that SBA did not have sufficient 
funding to continue these programs through fiscal year 2010. Yet 
instead of dealing with it in a more comprehensive manner either in the 
fiscal year 2010 omnibus or in a committee markup earlier this year, 
we're now only providing SBA with enough funding to continue these 
programs for one additional month. We could have marked up a bill in 
committee that provides SBA with sufficient funding for the rest of the 
fiscal year and come up with a spending offset that both sides of the 
aisle could agree to. Instead, we'll continue to create anxiety for 
small businesses, lenders, and the SBA that borrower fees will increase 
and guarantees will decrease at the end of April.
  I have great, great respect for Chairman Serrano, and I'm sure he 
would also like to deal with this problem in a comprehensive manner as 
opposed to on a month-to-month basis. Mr. Speaker, I support Chairman 
Serrano's proposed legislation because of its importance in providing 
credit to small businesses. However, I am disappointed that we are only 
temporarily addressing this program. I am also disappointed that we 
didn't consider this legislation in regular order.
  I reserve the balance of my time.
  Mr. SERRANO. Mr. Speaker, first of all, I want to thank my ranking 
member, Mrs. Jo Ann Emerson, who is a true partner in the work we do in 
our committee. We are an example of how to work together. I want to 
also thank her, Mr. Speaker, for the fact that she noted that I'm not 
spending one extra dollar here. This is not raising the deficit at all.
  Mrs. EMERSON. Will the chairman yield?
  Mr. SERRANO. I will yield.
  Mrs. EMERSON. I am very proud of you, and I just wanted you to know 
that.
  Mr. SERRANO. Well, I am very happy that you're proud of me. Mr. 
Speaker, I am very happy that she's proud of me.
  Mr. Speaker, I do want to clarify something, and the question that 
Mrs. Emerson asked is a very legitimate question: Why are we doing this 
the way we're doing it? Simply because we have not been able to get the 
other body, if I'm allowed to refer to them, to accept anything other 
than these kinds of bills at this point. And in answer to her second 
question, Which bill will we give the Senate, the one that we passed, 
or the one hopefully we'll pass today, the answer is, whichever one 
they'll take to deal with the issue. So that is really the problem 
here. Hopefully it will be resolved very soon.
  I reserve the balance of my time.
  Mrs. EMERSON. Mr. Speaker, I would just like to, once again, thank 
Chairman Serrano. I know he feels very strongly, as I do, that we have 
to find a way to make this permanent rather than force people to be 
anxious on a month-to-month basis. Hopefully in the next few months 
we'll be able to create some kind of bill or be able to satisfy all of 
the people who are so desperate to take the risk and become 
entrepreneurs and really make a difference in putting people back to 
work. So with that, I thanks the chairman, I thank the Speaker.
  I yield back the balance of my time.
  Mr. SERRANO. Mr. Speaker, I am in total agreement with my ranking 
member. It is our desire to make this permanent. We will continue to 
work on this. In the meantime, this provides the assistance that small 
businesses need in this country.
  Ms. RICHARDSON. Mr. Speaker, I rise in strong support of H.R. 4938, 
which extends the Small Business Loan Guarantee Program.
  I support this legislation because in these difficult economic times, 
extending the Small Business Loan Guarantee Program to extend 
opportunities to 26.8 million small businesses is a critical component 
of our economic recovery.
  H.R. 4938 permits the use of $40 million of the funds provided in the 
FY 2010 Omnibus Appropriations Act for fee reductions and eliminations 
under the Small Business Administration section 7(a) loan program and 
the section 504 certified development company program, as well as for 
the cost of guaranteed loans for qualifying small businesses. The 
measure also extends through April 30 the ability of the SBA to 
guarantee up to 90 percent of qualifying small business loans 
originating under the 504 program, and to refinance such loans.
  Small businesses employ just over half of all private sector 
employees, with a payroll of about $175 billion, and create many of the 
new jobs we need.
  In my district, the 37th Congressional District of California, there 
are approximately 16,300 small businesses.
  But in the global economy of the 21st century, small businesses, very 
much like the banks and the auto industry, need sound fiscal options to 
remain competitive, especially in difficult economic times for them and 
their customers.
  This is where the Small Business Administration can help.
  The SBA exists to aid and protect the interests of small business 
concerns, to preserve free competitive enterprise and to maintain and 
strengthen the overall economy of our Nation.
  The SBA was established in 1953 by the Federal Government to aid, 
counsel, assist and protect the interests of small business concerns, 
to preserve free competitive enterprise and to maintain and strengthen 
the overall economy of our Nation.
  The SBA's Office of Business Development assists firms owned and 
controlled by economically and socially disadvantaged individuals enter 
the economic mainstream by providing firm-specific analyses, 
counseling, management training, professional consulting and monitoring 
services, and access to business development opportunities under 
section 8(a) of the Small Business Act.
  Much like the loan guarantee program, the Section 8(a) program is 
well intended. But one of its problems is that too often program 
participants are ``graduated'' before they are sufficiently prepared to 
compete for contracts with large and established companies in the 
private sector.
  This has resulted in a large number of former 8(a) companies failing 
to remain in business shortly after leaving the development program.

[[Page 5123]]

  I have introduced legislation that can build upon the loan guarantee 
program extended by H.R. 493 and which would eliminate the problem of 
``graduating'' Section 8(a) program participants before they are 
sufficiently prepared to compete for contracts with large and 
established companies in the private sector.
  My legislation, H.R. 4897, the ``Not Too Small To Succeed in Business 
Act,'' reforms and modernizes the Section 8(a) program to help more 
small and disadvantaged business enterprises (DBE) remain in business 
and hire more workers by doing the following:
  1. Amending the Small Business Act to increase the net worth limits--
to $750,000--used by SBA in determining whether an applicant satisfies 
the ``economically disadvantaged'' requirement for admission to the 
program and increases to $2.25 million the net worth required for early 
graduation from the program.
  2. Extending the Section 8(a) program period to 11 years, from the 
current 9 years.
  3. Granting a one-time 2-year reinstatement in the Section 8(a) 
program for companies who were graduated from the program at the 
expiration of the 9 year term.
  Mr. Speaker, extending the SBA Loan Guarantee Program and amending 
the Section 8(a) Small and Disadvantaged Business Enterprise Program 
are a necessary part of strengthening our SBA programs to help small 
business succeed and provide jobs for our people. I urge all Members to 
join me in voting for H.R. 4938.
  Mr. SERRANO. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from New York (Mr. Serrano) that the House suspend the rules 
and pass the bill, H.R. 4938.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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