News From the
Committee on Small Business
Nydia Velázquez, Chairwoman

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

House Approves Legislation Expanding Small Business Access to Capital

Washington, D.C. - The U.S. House of Representatives today passed H.R. 3854, the “Small Business Financing Investment Act,” legislation to expand sources of capital for small businesses. By updating the Small Business Administration’s (SBA) capital access programs, the bill is expected to support $44 billion in affordable lending and investment for small firms every year, saving or creating 1.3 million jobs annually.

“The passage of this bill is an important step toward getting capital flowing again to our nation’s entrepreneurs,” said Rep. Nydia M. Velázquez (D-NY), the Chairwoman of the House Committee on Small Business. “Small businesses are our most reliable job creators and they will be vital to our economic recovery. This legislation will give them the tools they need to grow, create jobs and help lead our nation back toward prosperity.”

To better meet entrepreneurs’ needs, H.R. 3854 overhauls the Small Business Administration’s (SBA) capital access programs, which have not been updated in a decade. The bill strengthens the SBA’s lending programs by increasing the maximum loan sizes, giving businesses access to larger amounts of capital. By streamlining the loan application process, the legislation will make it easier for businesses to get loans, while also encouraging more lenders to participate. To help new companies, the bill establishes an Early-Stage Investment Program, which pairs funding from the SBA with private investment dollars to invest in emerging startups. Other measures build on the success of the American Recovery and Reinvestment Act (ARRA), keeping in place provisions that have helped small businesses get affordable loans since that law was enacted in February.

“The SBA’s lending programs are central to the economy, providing credit options for established businesses and ventures that are just getting off the ground,” said Chairwoman Velázquez. “Unfortunately, these programs haven’t been updated in ten years. By bringing them in line with today’s realities, we can better meet entrepreneurs’ needs, helping more ventures launch and existing businesses keep operating.”

By helping small businesses get the credit they need, H.R. 3854 is expected to be a powerful tool for economic growth. As more firms find affordable loans, they will be able to expand their operations and add employees. Providing sources of affordable small business capital will also assist aspiring entrepreneurs who want to start new businesses. Velázquez said the legislation will not only speed along the nation’s economic recovery, but help lay the groundwork for long term prosperity.

“Entrepreneurship is the cornerstone of our nation’s economic system and will be vital not just to this recovery, but to our long term prosperity,” Velázquez said. “This bill supports those risk takers who launch their own ventures, employ hardworking Americans and pursue their piece of the American dream.”

The “Small Business Financing and Investment Act” is the product of a series of hearings exploring small firms’ capital access challenges. By getting the small business credit markets moving again, the measure is expected to help businesses expand, as well as ensure struggling firms can access short term loans to say afloat. The bill passed the House on a strong bipartisan vote of 389 to 32. It now heads to the Senate for consideration.

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