Bean Redoubles Efforts for Small Business
PUBLISHED: May 27, 2010
As one of Congress' most consistent advocates for small businesses, Congresswoman Melissa Bean recognized National Small Business Week by introducing a bill that would expand the Small Business Administration's loan program for real estate and capital purchases, and by inviting a local business owner to Washington to testify about the impact federal loan programs have had on her business.
"In our approach to economic recovery, every week is Small Business Week," Bean said. "Given their importance to job creation, economic growth, and innovation, we cannot let up on our support for America's entrepreneurs."
Continuing her leadership in Congress on small business lending initiatives, Bean introduced a new proposal to expand the SBA's 504 loan program for capital purchases. The Small Business Asset Investment and Modernization (AIM) Act would:
- Raise maximum 504 loan size from $1.5 million to $5 million, and from $4 million to $5.5 million for small manufacturers.
- Allow small businesses to refinance existing eligible debt with a 504 loan, rather than just using 504 to finance an expansion.
- Borrowers must be current on payments.
- Refinance loans can only apply to owner-occupied commercial real estate, buildings, or equipment. - Cover its own costs through user fees, not relying on taxpayers.
The expansion is similar to other loan program changes that Bean supported in the Recovery Act and other legislation, which have led to a $27 billion increase in SBA loans.
Cindy Kottke, owner of the McHenry-based "C" You at the Movies chain of movie theaters, testified about the value of the 504 and 7(a) loan programs and other SBA programs in Washington yesterday, during hearings celebrating Small Business Week in the House Committee on Small Business. (photo of Kottke testifying below)
"One day I saw a sign ‘for sale or lease' on the closed downtown movie theater," Kottke said during testimony. "I drove the building owner crazy. I called, left messages-and finally convinced him to let us host an Oscar Party at the theatre. With the help of the SBA 7(a) loan we were able to purchase the McHenry downtown theater. And then the downtown Antioch theater. Today "C" You At The Movies, Inc. operates 4 indoor locations and one of the 12 remaining drive-ins in Illinois. We may not have the newest equipment or the latest innovations ... But our customers are loyal."
Bean also spoke on the floor of the House about the value of small businesses to the national economy and Congress' record on supporting small business growth and competitiveness.
The American Recovery and Reinvestment Act made vital changes to SBA loan programs, reducing fees for lenders and borrowers on the 7(a) and 504 loan programs and increasing government guarantees on 7(a) loans from 75 and 85 percent to as high as 90 percent. As a result, since February 2009, the SBA has helped support $27 billion in small business lending, and weekly loan approval volumes have increased by more than 90 percent.
The secondary market for SBA loans has also recovered. During a March 2009 visit to the White House, with the New Democrat Coalition, in which she serves as Vice-Chair, Bean personally urged President Obama to address the frozen secondary market for SBA loans, which provides a crucial source of liquidity to small business lenders. In September 2008, the secondary market for SBA loans bought an average of $328 million of loans from lenders per month. That dropped to below $100 million a month by January, making it difficult for banks and other lenders to offer credit to small businesses. After the New Dems' visit, the Administration pledged $15 billion in Treasury funds to reenergize that market for SBA loans, which helped boost lender confidence. The SBA's data for 2010 shows that, so far this year, the secondary market has rebounded to an average monthly loan volume of $326 million, which has helped support increased lending to small businesses.
