Small Business Financing Improvements Act of 2008

SMALL BUSINESS FINANCING IMPROVEMENTS ACT OF 2008 -- (House of Representatives - September 27, 2008)

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Ms. VELÁZQUEZ. Mr. Speaker, I yield myself as much time as I consume.

Mr. Speaker, I rise in support of this bill which would help entrepreneurs gain access to vital capital. Even before the recent troubles on Wall Street began, securing funding was an uphill battle for small businesses. Today, it is even more challenging than ever.

The effects of the current lending slump have been taxing. Liquidity challenges have caused lenders to cut lines of credit and recall loans to small firms. As these crucial sources of investment dry up, entrepreneurs have few places left to turn.

Venture capital investors, who have historically fueled the startup community, are becoming more and more cautious in doing so. At the same time, commercial banks have raised the bar for lending criteria on interest rates.

While the Small Business Administration has historically helped entrepreneurs during economic downturns, it is also failing to meet funding needs. In fact, the Small Business Administration lending is down 25 percent this year. Most small businesses rely on some form of loans or credit in order to meet their daily needs. Not surprisingly, the consequences of today's downturn in funding have had a crippling effect on their community.

The Small Business Financing Improvement Act of 2008 will help in small but important ways in part by enhancing the Small Business Administration lending programs. For example, it will improve the administration's 7(a) initiative, which is its most frequently used line of small business credit. It would also ease the flow of investments from venture capitalists. This will be particularly helpful as venture capital funding has a history of sparking innovation.

Furthermore, the bill I am proposing today will encourage lending from commercial banks. It will also do this by reducing the regulatory burden for financiers looking to fund small firms. In light of their current reluctance to make small business loans, this will be a tremendous incentive for banks to assist entrepreneurs.

This act will help thousands of small firms maintain and grow their companies. It will do this by allowing them to access the funds they need to go about their daily business and do everything from meet payroll to stock their shelves. Capital is the most basic and essential building block for small business ownership. After all, it is what allows entrepreneurs to start companies in the first place. For this reason, the bill has won full approval from the Small Business Administration.

I should also add that this provision has at one point or another been passed in the House.

Small businesses employ half of this Nation's workforce, and entire local economies depend on their success. The bill we're considering here today will be an important first step in ensuring that America's entrepreneurs can achieve their success. With this in mind, I urge my colleagues to support its passage.

I reserve the balance of my time.

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Ms. VELÁZQUEZ. Mr. Speaker, let me just say that small businesses are the innovators in this country and that for the last 7 years, this administration's failed policies have not provided the tools and resources for small businesses to be part of the energy solution and make this country energy independent.

We passed H.R. 6 last year. Let's get the White House and the administration to implement those provisions that will allow for small businesses to be part of innovation in relation to energy independence in this country.

I yield back the balance of my time.

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