Contact: Chris Chichester, 202-228-5843
SNOWE REPORTS BILL TO REAUTHORIZE SMALL BUSINESS ADMINISTRATION PROGRAMS
Legislation Concludes Months-Long Reauthorization Process Led By Senator Snowe
Washington, D.C. - Senator Olympia J. Snowe (R-ME), Chair of the Senate Committee on Small Business and Entrepreneurship, today introduced the Small Business Reauthorization and Improvements Act of 2006 (S. 3778), bipartisan legislation that features sweeping reforms to help the agency lead with the same dedication to excellence found in the entrepreneurs it serves. The Committee voted 18-0 last Thursday to approve the legislation and send it to the full Senate for consideration.
"Today is a pivotal time for the SBA. A new administrator, Steven C. Preston, has been sworn in, and I have held hearings to examine the agency’s programs that are set to expire September 30, 2006. The reauthorization and funding of SBA programs is vital to the continued growth of the economy and the small business community. My goal is for the process to conclude with a renewed SBA that is completely dedicated to fostering small business ownership and job creation in America. This legislation achieves that important goal," said Senator Snowe.
“The SBA and its programs have generated a tremendous return on investment, helping to create or retain over 5.3 million jobs since 1999,” stated Senator Snowe. “As Chair of the Committee on Small Business and Entrepreneurship, I firmly believe that the reauthorization process will lead to a renewed SBA that is wholly dedicated to fostering small business ownership across America.”
This legislation will achieve the following:
* Reform the SBA's largest small business financing program, the Section 7(a) loan program, which provided almost $15 billion in loans to small businesses last year, by increasing the maximum size of a loan from $2 million to $3 million.
* Require the SBA to implement a more efficient test for loan eligibility that measures businesses’ revenues, rather than merely their number of employees.
* Establish a National Preferred Lender program to increase small businesses’ access to capital by reducing duplicative administrative burdens on small business loans.
* Re-structure the Small Business Investment Company program, an innovative public-private venture capital partnership that has provided more than $25 billion in financing to small businesses.
* Expand the SBA’s capability to assist disaster victims by allowing private lenders to make loans at lower interest rates.
* Increase Federal authority to prosecute, suspend, and debar large corporations which obtain government contracts by misrepresenting themselves as small businesses.
* Create a stronger system of SBA size standards to ensure that Federal agencies respect SBA decisions on whether a company that receives a government contract is truly a small business.
* Address the small business health insurance crisis by creating a competitive, pilot grant program for Small Business Development Centers (SBDCs) to provide counseling and resources to small businesses about health insurance options in their geographic areas.
The legislation also rejects new loan fees.
"I strongly oppose SBA’s proposal to increase fees for these programs," stated Senator Snowe. "The fees would be charged against every loan that is greater than $1 million. In the 7(a) program, this is 3% of loans; in the 504 program, it’s 15% of loans; and in the SBIC program it’s 100% of the loans. A fee increase imposed on small businesses is not the proper way to balance the Federal budget, to put it mildly.”
Senator Snowe noted that despite a drastically declining share of the Federal budget, the data clearly indicates that the SBA’s programs have created or retained a significant number of jobs over the last several years. Between FY 1999 and FY 2005, the SBA’s Offices of Advocacy and Legislative Affairs report that the SBA’s lending and technical assistance programs enabled participating small businesses to create or retain 5.3 million new jobs. In addition, the SBA’s programs have helped to create or retain more jobs during each passing year. In FY 2005, the SBA’s programs created or retained 51.2 percent more jobs than they did in FY 1999.
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