Chabot, Velázquez Ask for Explanation of 504 Loan Program Outages

Press Release

Upon learning that the Small Business Administration's (SBA) CDC/504 Loan Program has experienced outages for roughly one third of all business days since June, House Small Business Committee Chairman Steve Chabot (R-Ohio) and Ranking Member Nydia Velázquez (D-NY) have written to SBA Administrator Maria Contreras-Sweet seeking answers.

The program, which is intended to promote local economic development by providing long-term fixed rate financing for small businesses, is handled through the Sacramento Loan Processing Center. The House Small Business Committee has learned that not only has the loan processing center experienced technical difficulties that stopped the processing of such documents as loan guarantees, environmental reviews, and appraisals, but that small businesses themselves had to notify the SBA of the outage.

Chairman Chabot and Ranking Member Velázquez said, "When significant problems arise that prevent SBA from effectively administering a statutorily created program, the agency has an obligation to inform the Committee and provide updates as to how these issues will be corrected."

Delays in the administration of the 504 loan program can be costly to small businesses, making them vulnerable to changes in interest rates as well as putting a strain on third-party lending partners that often provide interim funding.

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