Washington, D.C.— Today, the House passed a set of three bipartisan bills to make reforms to critical Small Business Administration (SBA) lending programs. The bills would make multiple improvements to the SBA’s 504 and Microloan programs.
“As small businesses look to achieve long term recovery from the COVID crisis, capital access will be more important than ever,” said Chairwoman Nydia M. Velázquez (D-NY). “These bipartisan bills will make needed improvements to vital small business lending programs and help get more capital into the hands of entrepreneurs. The improvements to the microloan program will be especially beneficial for the smallest of small businesses that often struggle to obtain financing through traditional means.”
Introduced by Rep. Andy Kim (D-NJ), Rep. Andrew Garbarino (R-NY), Rep. Marie Newman (D-IL), and Rep. Tim Burchett (R-TN)
This bill makes it easier for lenders to provide affordable microloans and technical assistance to entrepreneurs. It takes steps to lower interest rates, extend repayment terms, and eliminate the 1/55 rule.
Introduced by Rep. Tim Burchett (R-TN), Rep. Andy Kim (D-NJ), Rep. Scott Fitzgerald (R-WI), and Rep. Marie Newman (D-IL)
This bill offers additional technical assistance to microlenders in rural areas. It also increases the transparency of the microloan program by requiring SBA to report key metrics including average interest, fee, and default rates.
Introduced by Rep. Angie Craig (D-MN), Rep. Young Kim (R-CA), Rep. Sharice Davids (D-KS), and Rep. Steve Chabot (R-OH)
This legislation increases the maximum loan amount for manufacturing loans from $5.5 million to $6.5 million and requires SBA District Offices to partner with SBA Resource Partners to provide entrepreneurial development assistance to small manufacturers. The bill also provides decreased project costs for small manufacturers and increases the job creation/retention requirements for small manufacturers. The bill adjusts collateral requirements, and debt refinance parameters for small manufacturers. The bill would streamline numerous administrative processes associated with the 504 loan closing process by allowing accredited CDCs to perform numerous closing-related tasks, such as correcting any borrower or lender information on loan documents. The bill also creates an “Express” loan closing program for 504 loans less than $500,000.