Smith Praises Support for Small Business, Community Banks

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Washington - , Oct 22, 2009 - As the overall economy continues to show signs of life, our local small businesses continue to struggle to recover and access capital from our community banks. It is imperative that they receive the support they need in order to grow and add jobs. While many of the Federal Government’s efforts over the last year have helped stabilize our economy and financial sectors, they have not gone far enough.

With these concerns in mind, the President has asked Congress to increase the maximum size of the Small Business Administration’s (SBA) flagship 7(a) loans from $2 million to $5 million. Additionally, he has requested an increase in the size limit on the SBA’s 504 loans, which primarily are used for real estate, to $5 million from $2 million for standard borrowers, and to $5.5 million from $4 million for manufacturers. There is a strong need for an increase in these loans and Congress must respond to assist our local economies recover.

Additionally, to help make additional lending more feasible for our community banks – which provide most of the loans to our small businesses – the plan will lower the dividend rate for banks with less than $1 billion in assets from 5 percent to 3 percent. This will help our local banks support our small businesses.

I am pleased to see that the President has acted to support these critical institutions in our communities and I will continue to make supporting our small businesses and community banks a top priority.