News From the
Committee on Small Business
Nydia Velázquez, Chairwoman

For Immediate Release                       CONTACT:  Alex Haurek; Duncan Neasham
October 29, 2009                                                    202-226-3636

Velázquez on Legislation Expanding Small Business Lending

WASHINGTON, D.C. —Rep. Nydia M. Velázquez (D-NY), the Chairwoman of the House Committee on Small Business, delivered the following remarks today on the floor of the House of Representatives during debate of H.R. 3854, the Small Business Financing and Investment Act of 2009:

“I rise in support of this bill, which will enhance the SBA’s capital access programs. This bill is a bipartisan product. It has the support of 48 stakeholder groups, and could not have come together without the contributions of eight different Committee members, including two from the minority. It addresses a key concern for small firms, and ensures they have the resources to help grow our economy.

“If history is any guide, small businesses will be the key to our recovery. Since our nation’s founding, they have helped us bounce back from countless downturns—including the recession of the mid 1990’s. At that time, startup businesses generated 3.8 million new jobs. And ultimately, that is what our recovery efforts are all about—putting Americans back to work.
 
“Through innovation and ingenuity, small businesses have created enormous wealth for our nation. But America’s economic engine doesn’t run on good ideas alone. Small firms need capital to not only get off the ground, but to operate and grow. That’s why H.R. 3854 delivers better funding options to small firms at every stage of development. For the aspiring entrepreneur, it opens new avenues for seed capital and microloans. For the mid-market venture, it provides fresh funds for investment. And for the established business, it creates room for targeted risk and innovation. And it could not have come at a more critical time.

“Small business lending is declining at alarming rates. In July, a survey by the Federal Reserve found that 35% of banks had tightened lending to small firms.  In terms of credit cards—a popular source of funding for entrepreneurs—79% have seen their lines cut radically. These are exceptional declines. And if we fail to address them, we risk losing more than of our most innovative businesses—we risk losing hundreds of thousands of jobs.  

“Small businesses with tight profit margins don’t have the luxury of simply “tightening the belt.”  When money is short, they’re often forced to lay off workers. But with unemployment at 9.8%, we just can’t afford more losses. That’s why this bill delivers critical capital to new ventures. To begin, it helps steer equity investment to startups in high-growth fields like IT and clean energy. It also enhances SBA’s microloan program. Two weeks ago, my committee heard from an entrepreneur who used microloans to grow his business from a fledgling firm to a thriving enterprise with 30 employees. By improving the microloan program, imagine how many more new businesses—and new jobs—we can generate. 

“Ask any small business owner, and they will tell you that startups are not the only firms that need capital. Established ventures in fields like manufacturing, for example, need funding to adapt to the changing marketplace. By improving the 504 program, this bill gives them the flexibility to purchase new equipment and otherwise retool operations. When paired with new initiative like the New Markets Venture Capital and Renewable Energy Capital Investment programs, these efforts will help manufacturers emerge from the downturn stronger and better poised to create new jobs. Meanwhile, we are also delivering important lending options to our nation’s veterans, offering reduced borrower fees and increased loan guarantees. As our service men and women return home from deployment abroad, we need to be sure they have access to the economic opportunities that entrepreneurship offers.

“This bill is about choices. It’s about better options for the small businesses that didn’t get a bailout. H.R. 3854 provides critical funding to small firms in every industry and, most importantly, generates jobs. In fact, it will create or sustain more than 1.3 million positions nationwide. In the 111th Congress, job creation is our number one priority—it only makes sense to support legislation that gets us there.”

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