The chairman and ranking minority member of the Senate Committee on Small Business and Entrepreneurship have introduced legislation to enhance Small Business Administration lending programs.Committee chair Mary Landrieu, D-La., and ranking member Olympia Snowe, R-Maine, introduced the “Small Business Job Creation and Access to Capital Act of 2009.” The bill would increase the limit for Small Business Administration-guaranteed 7(a) loans for business acquisitions to from $2 million to $5 million and extend for a year the fee eliminations and increased guarantee that are both set to expire under the Recovery Act. The bill would increase the loan limit for SBA 504 loans used to fund business expansion from $3.5 million to $5 million.
“Our nation’s small businesses have created 64 percent of all new jobs in the last 15 years, yet in the last year nearly 85 percent of the jobs lost have come from small businesses,” said Landrieu. “Now that we have stabilized Wall Street, it is time to jump-start Main Street, and that begins with implementing the vital provisions within this bill.”
In addition, the bill would allow the 504 loan program to refinance short-term commercial real estate debt into long-term, fixed rate loans; and extend the authorization to provide 90 percent guarantees on 7(a) loans and fee elimination for borrowers on 7(a) and 504 loans through Dec. 31, 2010. Finally, the bill would direct the SBA to create a Web site where small businesses can identify lenders in their communities.
Landrieu said the loan limit increase could boost SBA lending by $5 billion next year alone, while the refinancing component of the bill could help save 60,000 jobs.
The Obama administration had already announced support for these initiatives and has promised that the Department of the Treasury, in consultation with the SBA, will work with Congress to explore how programs explicitly designed to promote small business lending can be fostered.
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