(Washington, D.C.)–Congressman Jim Langevin today supported legislation aimed at providing small businesses with expanded lending opportunities.  The legislation, H.R. 4062, stabilizes the Small Business Administration (SBA) 7(a) loan program, which was closed for one week earlier this year due to a lack of funds.  Since January, the program has been only able to provide loans that are half the regular size.

 “The 7 (a) loan program is critical to ensuring that small businesses can obtain private financing for entrepreneurial activities like new hires and other business growth,” said Congressman Langevin.  “Small businesses and banks around the country depend on these loans to create jobs and fuel economic expansion.  If these loans are not fully funded without delay, the companies that need this capital may be forced to stall growth or even lay off employees in the midst of an already difficult economic climate.”

This legislation lifts the restrictions on the 7 (a) program, which had lowered limits on loan size, and gets the program running at an adequate level.  By passing H.R. 4062, the House moved to help small businesses once again benefit from working export capital loans, which enable companies to grow and compete in the global community.  The bill also removes the regulatory restriction on SBA loans being part of larger financing packages.  While the legislation asks lenders to shoulder more of the program costs, it will create a new financing tool by increasing the size of the loan guarantee to $1.5 million, which will give them more lending options.

The SBA’s number one priority is to provide small companies with access to capital through its lending programs.  Over the last decade, the SBA has approved more than 424,000 loans for over $90 billion  - helping to launch new businesses across the country.  These loans are the only source of affordable, long-term financing for many of our nation’s small businesses.  7(a) loans spur economic development in underserved areas and can be used to purchase land, buildings, or even new companies.

This past January, Langevin appealed to the White House's Office of Management and Budget, Congressional appropriators and the Small Business Administration to provide necessary funding and immediately reinstate the 7(a) loan program.  Previously, in February of 2002, Congressman Langevin appealed to the Chairman of the Small Business Committee to restore the slashed funding in the loan program and worked with his Congressional colleagues to ensure the loans were adequately funded.

Last year, 27 different financial institutions in Rhode Island approved 961 7(a) loans for a total of over $94 million to Rhode Island's small business community.  These 7(a) loans comprise nearly one-third of all long-term loans made to U.S. small businesses, and the program is critical to the start-up success of small businesses across America.

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