Rep. Nydia Velázquez, D-N.Y., chair of the House Committee on Small Business, has proposed legislation to extend several expiring Small Business Administration lending programs.
Her bill, H.R. 3614, would extend through Oct. 31, 2009, under the same terms and conditions, the authorization for any program, authority, or provision, including any pilot program, that is currently authorized through Sept. 30, 2009, under the Small Business Act or the Small Business Investment Act of 1958.
The bill also amends the American Recovery and Reinvestment Act of 2009 with respect to the SBAs Business Stabilization Program, which provides loans on a deferred basis to viable small business concerns that have a qualifying small business loan and are experiencing immediate financial hardship. The proposed legislation also revises the BSP definition of qualifying small business loan to repeal the exclusion of SBA loan guarantees (or guarantee commitments) made before the enactment of the Recovery Act. The bill thus extends BSP coverage to small business concerns with an older, otherwise excluded SBA loan guarantee or guarantee commitment.
In addition, the bill amends the Small Business Investment Act of 1958 to prohibit a New Markets Venture Capital company receiving an operational assistance grant from issuing SBA-guaranteed debentures for any one company in an aggregate amount greater than 10 percent of the sum of: the private capital of the NMVC company; and the total amount of leverage projected by the NMVC company in its business plan in effect on the date on which the administrator granted it final approval to operate as an NMVC.
"The legislation before us will keep a number of vital programs at the Small Business Administration functioning, said Velázquez in a statement. This will give us time to complete our work with the Senate and fully reauthorize these measures, which are critical for our nation's entrepreneurs.
Velázquez noted that the America's Recovery Capital program in the Recovery Act provides short-term capital for businesses. To date, the ARC loan program has helped 1,600 firms stay afloat with interest-free loans.
"Currently, ARC loans cannot be used to pay down existing, government-guaranteed debts," she said. "By letting businesses use ARC loans for that purpose, this bill will open the program to even more firms, regardless of their previous financing decisions. This will open up $360 million in lending capital to help stressed small businesses that have 7(a) loans. Through the ARC program, these firms will receive nearly $6,000 per month, allowing them to redirect their cash flow into sustaining their operations."
