January 12, 2004
The Honorable Hector V. Barreto Jr.
Small Business Administration
409 3rd Street, SW
Washington, D.C. 20416
Dear Mr. Barreto:
On behalf of the 4,600 members of the Independent Community Bankers of America, we urge you to quickly work to reverse the unfortunate shut down of the highly successful and much needed 7(a) small business lending program. This is a matter of great urgency. If not immediately resolved, many small businesses will have the funding rug pulled out from under them as the SBA loan they were already depending on to launch their business and create jobs is put in limbo.
Community bank lenders are greatly concerned with SBA's recent dramatic shift in the 7(a) loan program policy to slash the maximum size of the loan amount from $2 million to $750,000 and then to halt this successful lending program altogether. These actions dramatically halted the capital available to thousands of small and growing businesses that specifically need and benefit from larger-sized loans. We urge that the 7(a) program holiday be lifted and the important flexibility granted by the existing $2 million loan amount maximum be preserved.
We continue to estimate 7(a) loan demand to well exceed $12 billion this fiscal year and will work with the SBA and Congress on innovative ways to best support this small business capital funding. The current pending budget appropriation to support only $9.5 billion in 7(a) loans is grossly out of sync with historic demand figures and current small business needs.
Small businesses remain the engines for new job creation and economic growth. Our community-based financial institutions play a critical role in providing small business lending nationwide. We urge you to help ensure that the successful SBA lending programs are both accurately and adequately funded. Thank you.
C.R. (Rusty) Cloutier
Independent Community Bankers of America
Sen. Olympia Snowe, Chairman, Senate Small Business Committee
Sen. John Kerry, Ranking Member, Senate Small Business Committee
Rep. Don Manzullo, Chairman, House Small Business Committee
Rep. Nydia Velazquez, Ranking Member, House Small Business Committee