News From the
Committee on Small Business
Nydia M. Velázquez, Chairwoman

For Immediate Release
April 25, 2007

CONTACT: Kate Gilman/ Austin Bonner,  (202) 225-4038

Bipartisan Legislation Will Lower the Cost of Capital for the Nation’s Small Businesses

WASHINGTON – As small businesses continue to be hit with rising health care and regulatory costs, they have also faced increasing capital costs, with some paying more than $50,000 to secure a loan. Today, the House of Representatives acted to address these concerns by passing H.R. 1332, the Small Business Lending Improvements Act of 2007, which lowers the cost of financing for small businesses by modernizing SBA lending initiatives, allowing entrepreneurs to invest further in their ventures and create jobs.  

“Access to capital is vital to the success of small firms in every region, industry, and sector,” Chairwoman Nydia M. Velázquez said.  “The passage of H.R. 1332 during National Small Business Week illustrates the significance of affordable capital to entrepreneurs and the importance of their vitality to the U.S. economy.”

A survey released by the National Small Business Association (NSBA) earlier this week found that access to capital remains a top priority for the nation’s 26 million small business owners.   H.R 1332, which was introduced by Congresswoman Melissa Bean, chair of the Subcommittee on Tax and Finance, and co-sponsored by Chairwoman Velazquez and Ranking Member Steve Chabot, expands financing options for start-ups in rural areas and emphasizes outreach to healthcare providers in order to address increasing demand to medical providers in rural and low-income areas. The bill also establishes a program to help more veterans returning from Iraq and Afghanistan to start their own ventures by reducing borrower and lender fees and increasing loan guarantees.  Important changes were also made to the 504 loan program, strengthening its ties to local communities and allowing borrowers to receive both a 504 loan and a 7(a) loan. H.R 1332 makes it easier for small businesses to access the capital they need to start and expand their ventures.

“The Small Business Lending Improvements Act is going to infuse our small businesses with the capital they need to start and grow successful ventures,” Chairwoman Velázquez said.  “Small businesses have had to pay increasing costs to access what was intended to be affordable financing for far too long now.  Today, with this bipartisan effort, entrepreneurs will see some relief.”

H.R.1332 is also part of the House Democrats’ Innovation Agenda, which was introduced yesterday.  Small businesses are often the catalysts for innovation, producing 13 to 14 times as many patents per employee when compared to their larger counterparts.  A key component of this success is access to affordable capital.  The Small Business Lending Improvements Act of 2007 strengthens entrepreneurs’ ability to secure financing that is critical to the development of groundbreaking technologies, in the end creating jobs and economic growth.

“America’s ability to innovate is our greatest strength and one of the foundations of our economic resiliency,” Congresswoman Bean said.  “To maintain their competitive edge, leadership countries should follow the example of leadership companies.  Toward that end, our Innovation Agenda promotes development of a best-in-class workforce and utilization of available technology to find and exploit emerging market opportunities.  I’m particularly proud that this agenda includes my legislation to improve access to capital for small businesses, which are the driving force of innovative ideas, new product development, and economic growth.”

H.R. 1332, the Small Business Lending Improvements Act of 2007 is part of the committee’s ongoing work to modernize and reauthorize the SBA, which has not been fully reauthorized in six years. The bill is supported by the American Community Bankers, Independent Community Bankers of America, American Veterans, Credit Union National Association, National Small Business Association, Veterans of Foreign Wars, American Bankers Association, U.S. Women’s Chamber of Commerce, U.S. Hispanic Chamber of Commerce, and the American Dental Association.  Click here to read the bill summary.

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