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ICBA Says America’s Small Businesses Deserve Better

Hearing on Small Business Administration Raises Concern

Washington, D.C. (April 6, 2006)—The Independent Community Bankers of America (ICBA) strongly supports the Small Business Administration (SBA) which allows the private sector to fund more than 98,000 loans to help finance small businesses across America each year. ICBA is greatly troubled by an April 5, 2006, Senate hearing where witnesses called for the complete elimination of the Small Business Administration.

The SBA's 7(a) and 504 loan programs are proven successes, leveraging less than $400 million in SBA administrative budget to allow $28 billion in private sector funds to help start or expand some 98,000 small businesses a year. Notably, lenders and borrowers already pay very steep fees to fully self-finance these loan programs, the mainstay of SBA's programs. These SBA-backed loans generate new jobs, greater economic growth, and tax revenues. This would not be possible without the unique SBA loan programs that allow lenders to provide capital to small businesses where traditional loan products cannot. SBA loans do not simply replace private sector lending, but instead add to the funds made available to small business borrowers.

The hearing, held by Sen. Tom Coburn (R-OK) in a subcommittee of the Homeland Security and Government Affairs Committee, included two witnesses that recommended the elimination of the SBA. ICBA believes all government programs should receive appropriate Congressional review and oversight, but to call for the abolishment of the SBA is simply unjustified, unwise, and unwarranted given the thousands of small businesses that have been successfully created or expanded by SBA loan programs.