CREED Act Builds Momentum at House Small Business Subcommittee
WASHINGTON, May 21, 2015 /PRNewswire-USNewswire/ -- Promoting small businesses and job creation to boost a sluggish national economy, Barbara A. Vohryzek, President & CEO of the National Association of Development Companies (NADCO), testified during a House hearing May 19 to urge passage of the recently introduced Commercial Real Estate and Economic Development Act of 2015 (CREED).
Vohryzek's testimony also covered business owners' need for increased access to Small Business Administration (SBA) fixed asset lending opportunities such as the 504 Program.
NADCO is an advocacy group of largely nonprofit lenders focusing on economic development, job creation, and entrepreneurialism using SBA's loan programs that provide capital for small businesses.
"I recommend that the successful debt refinancing with the 504 loan program, a program that was in place several years ago, be restarted permanently," said Vohryzek in her testimony. "This temporary refinance program for small businesses freed-up precious working capital which otherwise would have been spent on high interest rates or, even worse, on capital-depleting balloon loans."
The debt-refinancing program with the SBA 504 loan existed as a pilot program for 15 months from 2011 to 2012 and replaced $5 billion of expensive debt for U.S. small business owners at no cost to taxpayers. When the program reached its sunset date, it left 400 capital-seeking entrepreneurs across the U.S. stranded in the pipeline.
Four thousand small balance commercial mortgage-backed security loans will mature in the next three years, leaving many business owners in a difficult financial situation unless the CREED Act allows 504 lenders to once again refinance commercial equipment and real estate debt.
Ranking Member Judy Chu (CA-27), introduced the CREED Act last week after a joint introduction to the Senate by Sen. Jeanne Shaheen (NH) and Sen. Johnny Isakson (GA). It has received significant attention from Rep. Tom Rice (SC-07), Chairman of the subcommittee.
"Our small business sector is back at the heart of job creation after one of the worst economic downturns in history," said Rep. Chu. "The best way to cement the gains of the still-fragile economic recovery is to put more capital in the hands of those job creators. And that is exactly what the CREED Act does."
Rice said, "In my opinion there's nothing more important than American competitiveness and jobs. We can't have a strong country without a strong economy. And I think you guys are on the front lines and I can't thank you enough for what you do. I'm so impressed listening to how you perform your duties and how you grow jobs in this country."
Representatives Dave Brat, Janice Hahn, Richard Hanna, Tim Huelskamp, and Small Business Committee Chairman Rep. Steve Chabot were also in attendance to hear from the panel, which consisted of representatives of SBIC, SBA 7(a) and other micro-lending programs.
This conversation on SBA 504 debt refinancing and the CREED Act takes place less than a week after a DC-based NADCO conference of prominent SBA 504 lenders visited dozens of congressional leaders on The Hill.
About NADCO
The National Association of Development Companies (NADCO) is the trade association of SBA lenders including Certified Development Companies (CDCs), nonprofit companies that have been certified by the Small Business Administration (SBA) to provide financing for small businesses under the SBA 504 Program. NADCO represents nearly 240 CDCs, serving all 50 states. In 2014, the industry provided $4.2 billion to nearly 5,700 U.S. small businesses.
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SOURCE National Association of Development Companies (NADCO)
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