Case helps lead fight to save "flagship" small business loan program
Case helps lead fight to save "flagship" small business loan program
The program approved $29 million in loans to Hawai'i's small businesses in FY '03
Washington, D.C. - Congressman Ed Case (Hawai'i, Second District) today helped lead a successful fight to maintain current funding for the Small Business Administration's most popular loan program amid attempts to dismantle the program through proposed budget cuts.
On a vote of 281-137, the U.S. House today approved an amendment to maintain funding of $80 million to the SBA's 7(a) program which backs billions of dollars in loans to small businesses each year and is the SBA's most commonly used loan. This final bill is expected to pass; that vote will occur either late tonight or tomorrow in the House.
"It's time to stop squeezing our nation's small businesses out of business," said Case, a member of the House Committee on Small Business, who joined colleagues on the U.S. House floor for a debate on the amendment this afternoon in Washington, D.C. "This administration has increased regulation on small businesses, added to the burden of paperwork for small businesses and squeezed small business out of federal procurement, and now proposes to eliminate this loan program that made 269 loans worth nearly $29 million to small businesses in Hawai'i. Of that number, 132 of those loans, worth nearly $15 million-nearly half of all loans-were made to companies operating in the rural communities of the Second District that I represent.
"The situation is even more compelling for my state in this fiscal year. Through May 31, 2004, the SBA had approved 260 loans, worth about $18.5 million, to Hawai'i small businesses. Rural small businesses have received 61 of those loans-representing over $6 million."
Case said the loans are needed because they spur economic development and are the "only source of affordable, long-term financing for many of our nation's small businesses" that tap the program to do everything from expanding existing facilities to providing long-term working capital including accounts payable. In addition, Case said recent consolidation of banks and other financial institutions across the country has reduced the number of small-business-friendly banks substantially in Hawai'i in recent years, narrowing down lending opportunities for small businesses.
"Hawaii is also home to one of the largest percentages of minority-owned businesses which represent 57.8 percent of the state's businesses, generating $14.8 billion in revenues in 2002-the most recent year for which this data are available," said Case who noted that small businesses in his state represent 96.7 percent of all business in Hawaii.
On the House floor, Case asked rhetorically how small mom-and-pop operations in towns like Na'alehu could access capital to start up or maintain a small business other than through the SBA. "Conventional financing just isn't available to them."
Case said the 7(a) loan program is the "flagship" of the SBA which in the past decade, "has approved more than 424,000 loans for over $90 billion, assisting countless small businesses across the country with their basic capital requirements. It is especially critical in the non-urban parts of our country like my Second District."
"The funding this amendment provides is a blip on the radar screen when compared to the billion-dollar sole source contracts this administration has awarded to big business," said Case. "Let's get our priorities straight!"