Senators Shaheen, Coons Introduce Legislation that Ensures Small Business Access to LoansOctober 17, 2022
The SBA 504 loan program, which provides fixed rate financing for major investments, went briefly offline last year
(Washington, DC) – U.S. Senator Jeanne Shaheen (D-NH), a senior member of the Senate Committee on Small Business and Entrepreneurship, introduced legislation to ensure that American small businesses have access to low-cost, fixed-rate, long-term loans. The 504 Loan Availability Act will prevent the Small Business Administration (SBA) CDC/504 loan program from becoming temporarily unavailable near the end of each fiscal year, and help guarantee that small businesses can invest in themselves and grow. The bill provides flexibility by combining the authorization of regular 504 loans and 504 refinancing loans under a single authorization cap. Combining these authorizations—without increasing the overall authorization level—will help prevent either program from hitting its cap partway through the fiscal year and becoming temporarily unavailable until the new fiscal year begins.
“The 504 loan program is one of the premier tools available for small businesses to access patient capital to invest and expand operations,” said Senator Shaheen. “I’ve long fought for increased flexibility for this program, including allowing borrowers to refinance existing 504 loans, and this simple fix will ensure these critical programs remain available to small businesses for years to come, under a variety of market conditions.”
“Small businesses form the backbone of American manufacturing, and when they have reliable access to capital to grow their operations, they strengthen our economy, create good-paying jobs, and expand production right here in America,” said Senator Coons. “I’m proud to partner with Senator Shaheen to ensure that there are no further interruptions to the 504 program so that business owners nationwide can be confident in this reliable source of affordable financing.”
“The 504 Loan Availability Act will have a significant impact in New Hampshire and across the country by providing better access to capital for growing small businesses. We applaud Senators Shaheen and Coons for their diligent work supporting small businesses,” said Scott Gardiner, President & CEO of Granite State Development Corporation.
The SBA 504 Certified Development Company Loan program provides SBA-backed loans for applicants that might not qualify for conventional financing and conserves working capital by requiring only a 10 percent borrower contribution. Certified Development Companies (CDCs) are SBA-authorized nonprofit corporations that work with third-party lenders to promote economic development within their communities through 504 loans. 504 loans feature 10, 20 or 25 year terms and below-market fixed interest rates. Loan amounts are generally capped at $5 million, though certain eligible energy-efficient or manufacturing projects may qualify for up to $5.5 million each.
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