Durbin Meets with Head of Small Business Administration, Steven Preston of Downers Grove, IL
DURBIN MEETS WITH HEAD OF SMALL BUSINESS ADMINISTRATION, STEVEN PRESTON OF DOWNERS GROVE, IL
U.S. Senator Dick Durbin (D-IL) today met with Steven Preston, Administrator of the Small Business Administration (SBA) and former Executive Vice President of Service-Master, in Downers Grove, IL. Durbin requested today's meeting with Mr. Preston to discuss how SBA can improve loans for small business entrepreneurs and to discuss recent improvements to the disaster loan program.
"Dr. Muhammad Yunus won the Nobel Peace Prize last fall for providing the world with an outstanding model of microloaning. We can now use that model to help thousands of Americans who are trying to start small businesses," said Durbin. "Today, I stressed to Mr. Preston that we need to fund microloan programs in the federal budget instead of placing the burden on those looking for financial assistance."
In the budget presented to Congress yesterday, the President proposed cutting funding for the SBA Microloan Program by $13 million. The SBA Microloan Program provides small loans to new or growing businesses by funneling investment capital through nonprofit community-based lenders. The administration has proposed funding the program through higher interest rates on intermediaries which in turn will increase interest rates on the loans themselves. In today's meeting, Durbin raised concerns that higher interest rates could drive potential borrowers away from the process.
Durbin and Preston also discussed recent improvements to SBA's disaster loan program. The SBA recently implemented new processes that allow them to process loan requests more efficiently. Preston reported that the SBA is currently close to eliminating the backlog of requests from Hurricanes Katrina and Rita and are in a much better position to deal with future disasters.
In 2006, SBA's Illinois District Office assisted 4,381 businesses in obtaining $688 million in general business loans. These loans were made through fixed asset loan programs. Working through nearly 200 local lenders, borrowers can obtain SBA guarantees on their loans. The maximum loan guarantee for one business or individual is $1.5 million. Proceeds can be used for working capital and to purchase machinery and equipment, real property, and inventory. Guaranteed loans may also be used to purchase an existing business. Terms vary depending upon the use of loan proceeds. Interest rates also vary depending upon the size and term of the loan.
http://durbin.senate.gov/record.cfm?id=268604&&