(WASHINGTON, DC) – Avoiding an abrupt halt to a critical small business loan program, the U.S. Senate last night passed legislation authored by Senator Jeanne Shaheen (D-NH), Ranking Member of the Senate Small Business and Entrepreneurship Committee, and Senator David Vitter (R-LA), Chairman of the Committee, to extend the program’s lending authority. The Small Business Administration’s (SBA) 7(a) program administers the agency’s most popular loan and, due to high demand, reached its annual authorized limit of $18.5 billion. Without an increase in its lending authority, the SBA would be unable to offer loans until the new fiscal year begins on October 1st. Shaheen’s bill increases the program’s loan authority to $23.5 billion. The program is funded through user fees and does not cost the taxpayer.
“This program is a proven job-creator in New Hampshire and across the country,” said Shaheen. “Many small businesses make use of this loan to finance long term plans for expansion and growth. This program is a model of public-private partnership and should be allowed to grow with demand to meet the needs of small business and entrepreneurs. I hope the House will move quickly to approve this bipartisan solution to get this program running again.”
“Small entities – the driving force of our economy – need to have access to capital,” said Vitter. “Thousands of small businesses across the nation rely on this important SBA program, and any prolonged lapse of the program would have threatened their ability to secure the credit necessary to start or expand their businesses. I am relieved and glad to see the Senate pass our common sense, broadly bipartisan amendment.”
The SBA’s 7(a) program is a loan guarantee used to support eligible small businesses that seek the loans themselves through private banks. A video overview of the 7(a) program is available on the SBA website here. A similar extension of the program’s authority was needed last year.