A group of 13 senators has written to the Appropriations Committee requesting funds to extend Small Business Administration Recovery Act lending programs.
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According to the SBA, its Recovery Act funding has generated loans to more than 40,000 small businesses. During the time that Recovery Act funding was available, SBA lending increased by 79 percent, supporting $16.5 billion in SBA-backed lending," said Sen. Mary Landrieu, D-La., one of the senators who signed the letter. That is why it is critically important to extend the Recovery Act funding for SBA loans.
The original $375 million in funding has been exhausted, forcing the SBA to create a waiting list of more than 700 businesses that are asking for more than $315 million in loans.
The funds requested are for $140 million for increased 7(a) loan guarantees; $283 million for the elimination of borrower fees on 7(a) loans; and $56 million for the elimination of borrower and lender fees on SBA-guaranteed 504 loans.
If the funds are approved, they will support $18.5 billion in small-business lending, including $14.5 billion in 7(a) loans and $4 billion in 504 loans.
Signing onto the letter were Senators Joseph Lieberman, Jeanne Shaheen, Barbara Boxer, Sheldon Whitehouse, Roland Burris, Carl Levin, Maria Cantwell, Kay Hagan, Sherrod Brown, Tom Udall, Jeff Merkley and Kirsten Gillibrand.
According to the SBA, loan volumes have decreased significantly since the November 23 cutoff date, with 7(a) loans falling more than 70 percent from their high following the Recovery Act. For the first two full weeks after the SBA was forced to create its waiting list, 7(a) loan volume is below pre-Recovery Act levels.
The Senate Committee on Small Business and Entrepreneurship, which Landrieu chairs, held a markup Thursday of S. 2869, "The Small Business Job Creation and Access to Capital Act of 2009." The bill would authorize the extension of the elimination of fees and increased guarantees for SBA loans, both Recovery Act provisions. It would also authorize an increase in the loan caps.