Funds could spur $18.5 billion in SBA lending.
WASHINGTON, Dec. 16 /PRNewswire-USNewswire/ -- United States Senate Committee on Small Business and Entrepreneurship Chair, Mary L. Landrieu, D-La., along with twelve other Senators, today sent a letter to the Committee on Appropriations requesting funds to extend Small Business Administration (SBA) Recovery Act lending programs.
"Experience has shown that SBA Recovery Act funding is successful: it actually does go out to the small businesses it is intended to help. During the time that Recovery Act funding was available, SBA lending increased by 79 percent, supporting $16.5 billion in SBA backed lending," Senator Landrieu said in the letter. "That is why it is critically important to extend the Recovery Act funding for SBA loans. The original $375 million in funding helped support $16.5 billion in loans to small businesses, but now that funding has been exhausted the SBA has been forced to create a waiting list of more than 700 businesses waiting on more than $315 million in loans. If Congress acts on this request, we can clear the waiting and support up to $18.5 billion in SBA backed loans."
The funds requested are for:
- $140 million for increased 7(a) loan guarantees;
- $283 million for the elimination of borrower fees on 7(a) loans; and
- $56 million for the elimination of borrower and lender fees on 504 loans.
If these funds are approved, they will support $18.5 billion in small business lending, including $14.5 billion in 7(a) loans and $4 billion in 504 loans. According to the SBA, its Recovery Act funding has generated $16.5 billion in loans to more than 40,000 small businesses.
As of November 23, funds included in the Recovery Act for small business lending had run out. To date, there are more than 700 businesses currently on the waiting list for loans from the SBA totaling more than $315 million. According to the SBA, loan volumes have decreased significantly since the November 23rd cutoff date, with 7(a) loans falling more than 70 percent from their high following the Recovery Act. For the first two full weeks after the SBA was forced to create their waiting list, 7(a) loan volume is below pre-Recovery Act levels.
Signing onto the letter were Senators Joseph Lieberman, Jeanne Shaheen, Barbara Boxer, Sheldon Whitehouse, Roland Burris, Carl Levin, Maria Cantwell, Kay Hagan, Sherrod Brown, Tom Udall, Jeff Merkley and Kirsten Gillibrand.
To view a copy of the letter sent to Appropriations, please click here.
Senator Landrieu will hold a markup tomorrow of S. 2869, "The Small Business Job Creation and Access to Capital Act of 2009." This bill would authorize the extension of the elimination of fees and increased guarantees for SBA loans, both Recovery Act provisions. It would also authorize an increase in the loan caps for these SBA loans. To read more about S.2869, please click here.
SOURCE U.S. Senate Committee on Small Business & Entrepreneurship