WASHINGTON, D.C. – Today, the House Committee on Small Business is holding a hearing titled “Pathway to Capital: The Role of SBA Lending in Supporting Main Street America.”

Chairman Roger Williams’ opening statement as prepared for delivery:

Welcome to today’s hearing, “Pathway to Capital: The Role of SBA Lending in Supporting Main Street America.”

I want to thank our witness, Thomas Kimsey, the Associate Administrator of the SBA Office of Capital Access, for being here. I look forward to hearing your testimony and having a robust discussion regarding the resilience of the SBA’s Office of Capital Access.

The Office of Capital Access administers the SBA’s government-backed lending programs, such as the flagship 7(a) program, the 504-loan program, and the microloan program.

Together, these programs work to make capital available to small businesses that would otherwise be unable to access capital on reasonable terms.

As a life-long small business owner myself, I know that access to capital is the lifeblood of success for Main Street America. The Working Families Tax Cuts and President Trump’s deregulatory efforts allow small businesses to grow and compete, but access to capital remains critically important.  

While the SBA does not lend directly to small businesses, it incentivizes private lenders to do so through government-backed loans. Since taxpayer dollars could be on the hook to pay these guarantees, the SBA lending programs must operate with incredible care.

Unfortunately, that was not the case under the prior administration. The Biden-Harris Administration undermined the integrity of the SBA’s lending portfolio by slashing prudent underwriting standards, repealing a 40-year-old moratorium on licensing new Small Business Lending Companies, and making excessively risky loans, among other actions.

Predictably, this led to rising defaults in the 7(a) program and resulted in the first negative cash flow for the program in over a decade - putting taxpayer dollars at risk.

These decisions went against longstanding SBA positions that have been held across Republican and Democrat administrations and were often met with bipartisan and bicameral rebuke. 

The Biden-Harris Administration’s actions not only risked taxpayer dollars, but they also allowed entrepreneurs to take loans they could not pay back. That is why, in today’s hearing, it is so important that we fully understand what the current Administration is doing to clean up the SBA lending programs.

I appreciate the actions that Administrator Loeffler and Associate Administrator Kimsey quickly took to reverse course. I look forward to exploring ways Congress can close loopholes to ensure that no future administration transforms the SBA to the detriment of the loan portfolio.

I now recognize the distinguished Ranking Member for her opening remarks.

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