Opening Statement for Markup on
The Small Business Financing and Investment Act of 2009
Committee on Small Business
United States House of Representatives
October 21, 2009
Good morning. Thank you, Madam Chairwoman, for holding this markup. I appreciate your leadership on this issue and commend you for working in a bipartisan manner on developing legislation that will provide changes to the Small Business Administration programs that provide needed capital to small businesses. Testimony before this Committee shows that small businesses have been unable to obtain needed capital to maintain or expand their businesses. In our districts, business owners have noted that they have seen banks reduce their credit lines and demand excessive collateral to get a loan. The inability to obtain capital has a serious detrimental effect on the capacity of small businesses to grow their businesses and pull us out of the current recession.
The Committee has worked hard to produce legislation with significant discussions between Democrat and Republican members. The bill before us today is a compilation of legislative initiatives drafted by members from both sides of the aisle. Their contributions cannot be understated. I would especially like to thank Congressmen Buchanan and Luetkemeyer for their input on this legislation. The bill before us today makes important changes to improve the efficiency and increase the transparency of the SBA’s lending programs. Those modifications are needed to ensure that capital is made available to as many small businesses as possible in a timely manner because delay in the marketplace can result in lost opportunities for small businesses.
In addition to creating improvements for the management of the SBA capital access programs, the bill’s primary focus is to provide vital capital to small businesses, including those in rural areas. The bill increases outreach efforts for rural lenders in the 7(a) loan program. Modifying the areas in which New Market Venture Capital Companies can operate will provide greater investment opportunities for rural areas that have been bypassed by other venture capitalists. These are only two of the examples of the many improvements that will increase access to capital by small business owners.
Despite these significant improvements, there are still unresolved concerns with the bill. While I strongly endorse efforts for the SBA to find lenders to make loans, I am troubled that the SBA still could make a loan if no bank is willing to make such a loan. To me that suggests an underlying problem with the loan package and I do not think that the SBA should make the loan.
The disaster loan provisions include an authorization to make grants to small businesses rather than loans. I recognize that FEMA provides grants to individuals but not sufficient grant funds to small businesses. I am not sure that we should change a loan program to a grant program especially without any detailed findings that grants would have saved businesses during recovery from a disaster that were not saved by loans. Finally, we must recognize the current fiscal constraints. The deficit is at an all time high and Congress is considering a number of other potentially expensive programs. As a result, I am concerned about the potential overall cost of the bill.
These are my reservations on the bill before us. Given, the importance of these bills to the potential prosperity of the American small business economy, I support the bill being reported out of Committee. I look forward to working with the Chairwoman to address these concerns as the legislative process moves forward. Again, I would like to thank the Chairwoman for holding this markup and yield back the balance of my time.