FOR IMMEDIATE RELEASE
ICBA Urges Congress to Boost Small Business Lending Program
Washington, D.C. (March 1, 2007)—The Independent Community Bankers of America (ICBA) today asked Congress to restore a reasonable Small Business 7(a) loan program appropriation to ease the damage of recent steep fee increases on lenders and borrowers. ICBA also asked Congress to reinstate the successful Small Business Administration (SBA) "LowDoc" program with an 85 percent guarantee for loans up $250,000.
ICBA made these recommendations and four others that will boost lending to small businesses in testimony before the House Committee on Small Business. ICBA praised Small Business Committee Chairwoman Nydia Velazquez (D-NY) for holding this important hearing to begin addressing lending industry concerns with the SBA programs. The committee is examining the SBA loan programs and ways to ensure greater availability of capital to small businesses.
"The SBA loan programs are a true success story of how the federal government, working with private sector lenders, helped fund thousands of small businesses that otherwise would not have had access to capital," said David Schroeder, president of American Enterprise Bank, Buffalo Grove, Ill., testifying on behalf of ICBA. "The SBA guaranty loan programs are unique and extremely valuable. However, recent budget cuts, sharp fee increases on both lenders and borrowers, and the elimination of the successful LowDoc program have undermined the full potential of the SBA loan programs."
Rounding out ICBA's recommendations, the association asked Congress to:
- Boost the SBA budget which has been cut nearly in half over the past six years.
- Reinstate the availability of combination ("piggyback") financing to help serve small businesses with larger borrowing needs.
- Support $19 billion in 7(a) lending authority and $9 billion in Section 504 lending authority, up from the stagnant $17.5 billion and $7.5 billion proposed in the 2008 federal budget.
- Apply additional SBA resources to better support regional SBA offices in assisting the thousands of community lenders delivering SBA loans to deserving small businesses nationwide.
Read ICBA's complete testimony at www.icba.org.