[Congressional Record (Bound Edition), Volume 161 (2015), Part 9]
[House]
[Pages 12781-12784]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  1715
                 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

[[Page 12782]]

       (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 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

[[Page 12783]]

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 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.

                              {time}  1730

  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.

[[Page 12784]]


  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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