Extending The Small Business Loan Guarantee Program

Floor Speech

Ms. RICHARDSON. Mr. Speaker, I rise in strong support of H.R. 4938, which extends the Small Business Loan Guarantee Program.

I support this legislation because in these difficult economic times, extending the Small Business Loan Guarantee Program to extend opportunities to 26.8 million small businesses is a critical component of our economic recovery.

H.R. 4938 permits the use of $40 million of the funds provided in the FY 2010 Omnibus Appropriations Act for fee reductions and eliminations under the Small Business Administration section 7(a) loan program and the section 504 certified development company program, as well as for the cost of guaranteed loans for qualifying small businesses. The measure also extends through April 30 the ability of the SBA to guarantee up to 90 percent of qualifying small business loans originating under the 504 program, and to refinance such loans.

Small businesses employ just over half of all private sector employees, with a payroll of about $175 billion, and create many of the new jobs we need.

In my district, the 37th Congressional District of California, there are approximately 16,300 small businesses.

But in the global economy of the 21st century, small businesses, very much like the banks and the auto industry, need sound fiscal options to remain competitive, especially in difficult economic times for them and their customers.

This is where the Small Business Administration can help.

The SBA exists to aid and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our Nation.

The SBA was established in 1953 by the Federal Government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our Nation.

The SBA's Office of Business Development assists firms owned and controlled by economically and socially disadvantaged individuals enter the economic mainstream by providing firm-specific analyses, counseling, management training, professional consulting and monitoring services, and access to business development opportunities under section 8(a) of the Small Business Act.

Much like the loan guarantee program, the Section 8(a) program is well intended. But one of its problems is that too often program participants are ``graduated'' before they are sufficiently prepared to compete for contracts with large and established companies in the private sector.

This has resulted in a large number of former 8(a) companies failing to remain in business shortly after leaving the development program.

I have introduced legislation that can build upon the loan guarantee program extended by H.R. 493 and which would eliminate the problem of ``graduating'' Section 8(a) program participants before they are sufficiently prepared to compete for contracts with large and established companies in the private sector.

My legislation, H.R. 4897, the ``Not Too Small To Succeed in Business Act,'' reforms and modernizes the Section 8(a) program to help more small and disadvantaged business enterprises (DBE) remain in business and hire more workers by doing the following:

1. Amending the Small Business Act to increase the net worth limits--to $750,000--used by SBA in determining whether an applicant satisfies the ``economically disadvantaged'' requirement for admission to the program and increases to $2.25 million the net worth required for early graduation from the program.

2. Extending the Section 8(a) program period to 11 years, from the current 9 years.

3. Granting a one-time 2-year reinstatement in the Section 8(a) program for companies who were graduated from the program at the expiration of the 9 year term.

Mr. Speaker, extending the SBA Loan Guarantee Program and amending the Section 8(a) Small and Disadvantaged Business Enterprise Program are a necessary part of strengthening our SBA programs to help small business succeed and provide jobs for our people. I urge all Members to join me in voting for H.R. 4938.

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