Amendment Passes House, Showing Bipartisan Support for Small Business
Price Urges Support for Small Business Funding Amendment
Washington, D.C. - Today, US Rep. David Price (NC-04) urged support for an amendment to the Science-State-Justice funding bill, which would provide additional support to the Small Business 7(a) loan program. Price, a staunch advocate for small businesses, called on the House to support the measure in a speech on the House floor. The amendment passed 234 – 189.
BACKGROUND: As approved by the House Appropriations Committee,, the Science-State-Justice bill once again contained no support for the 7(a) program, which is the Small Business Administration's key lending program. Without this amendment, the 7(a) program would be run solely on the fees charged to small businesses and lenders, causing large fee increases. The amendment offsets its cost by reducing funding for technology upgrades at the departments of Justice and State.
The full text of Price's remarks is below:
"I rise today in support of the Velazquez amendment because I believe we should be doing more, not less, to help our nation's small businesses.
"Small business is the #1 engine of job creation in the United States. And a good deal of the fuel for that engine has been provided by the Small Business Administration's 7(a) loan program, which in past years has provided 30 percent of all long-term small business loans--making it the largest source of public or private financing.
"For years, that public/private partnership and shared risk in the 7(a) program has created millions of jobs in America—with nearly 500,000 created last year alone.
"And so one would assume that such a proven program would be supported by everyone. But last year we found out what happens when there is a choice between more tax cuts for the wealthy or helping our small businesses. Despite the fact that the House passed a similar amendment last year, the administration and Republican leadership changed the 7(a) program in conference so that all expenses and risks would be born by the small businesses themselves.
"The result of this change is exactly what we predicted. Fees for smaller loans of less than $150,000 have nearly doubled, and fees for larger loans have risen by $3,000-$5,000. Fifty lenders have dropped out of the program. It is much harder for small businesses in rural areas and small towns to get 7(a) loans. And, most significantly, 7(a) lending has decreased every quarter since the new fees were added; the amount of the average 7(a) loan has dropped by $75,000 since the new fees have been put in place.
"The facts are clear. We have a serious problem. And the Velazquez amendment provides the obvious answer: restore funding for the 7(a) program. The amendment would provide $79 million for 7(a) loan-loss reserves, which will leverage over $18 billion in small business lending.
"We hear a lot of rhetoric about the importance of our small businesses. This amendment gives Members the opportunity to show they're willing to do more than talk about the importance of our small businesses. So I encourage my colleagues to put some money where their mouth has been and vote "yes" on the Velazquez amendment."
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