Rep. Chu Statement on Authorization Increase of Critical Small Business Loan Program
Washington, DC – Today, the House of Representatives passed the Senate-amended H.R. 2499, the Veterans Entrepreneurship Act of 2015. Among other things, this bill will provide an increase in authorization to allow the Small Business Administration’s (SBA) 7(a) loan program to operate until the end of the fiscal year. The flagship program is designed to give small businesses access to capital through long-term loans in situations where capital cannot be found through conventional bank loans. Due to an anticipated increase in lending, SBA reached the $18.75 billion legal lending limit for the 7(a) program on Thursday, July 23, and was forced to shut down. Rep. Judy Chu (CA-27), who called on the Speaker of the House to bring legislation to the floor to raise this authorization limit in a floor speech earlier last week, released the following statement:
“I am so relieved that this important program will continue to function through the end of the fiscal year, but it is a shame we got to this point at all. The 7(a) program is a success – helping small businesses by providing the loans they need when other doors to capital are closed, and operating at no cost to the taxpayer. In 2014 alone, the 7(a) program provided over 52,000 loans totaling $19 billion, and an even greater amount of interest was predicted for this year. That is a sign of a program that is working well. But unfortunately, Congress failed to provide an adequate lending limit in time, choosing instead to force this program to shut down temporarily. We need to stop governing by crisis and instead make sure that we provide the commitments necessary to instill confidence in our economy. I will continue to work to make sure successful programs like SBA’s 7(a) loans are able to continue to support small businesses without interruption.”
This bill, previously passed by the House but amended by the Senate to include the 7(a) language, was approved by voice vote. The bill now moves to the President’s desk to be signed into law. Rep. Chu’s floor speech on the need to increase 7(a) financing authorization can be seen here.