Senate Small Business Committee passes Shaheen’s CREED Act, amendment to improve oversight of taxpayer dollars
(Washington, D.C.) — U.S. Senator Jeanne Shaheen (D-NH), a member of the Senate Committee on Small Business and Entrepreneurship, voted Monday night for key small business bills giving access to capital and aiding in disaster recovery, including the bipartisan Commercial Real Estate and Economic Development (CREED) Act she introduced with Senators Mary Landrieu (D-LA) and Johnny Isakson (R-GA). The CREED Act would reauthorize the Small Business Administration’s 504 refinancing program, which would give small businesses better access capital at no cost to taxpayers. The bill specifically gives businesses access to long-term, fixed-rate loans which help them purchase assets for expansion, thereby boosting economic growth and job creation.
“We must do more to boost small businesses and the plan we passed last night is a bipartisan, common-sense and long-term way forward that will help create job,” Shaheen said. “This particular program has given many New Hampshire small businesses the capital they need at no cost to the taxpayers, which will help them grow and hire more workers. We should be doing everything we can to empower small businesses, and I am hopeful this program will be in place for many more years.”
Specifically, the CREED Act would permanently reauthorize a program that allows small business owners to use a specific type of loans, known as SBA 504 loans, to refinance certain existing commercial mortgages. The provision was originally enacted as part of the Small Business Jobs Act of 2010 and Shaheen has been a part of a bipartisan group working to extend the program past its September 2012 expiration.
The 504 loan program is a financing tool for economic development that provides small businesses with long-term, fixed-rate loans to help them acquire major fixed assets for expansion or modernization. Certified Development Companies (CDC), typically private, nonprofit corporations set up to spur community based economic development, work with the SBA and private sector lenders to provide financing to small businesses under this loan program. In Fiscal Year 2012, the program’s second and final year, the SBA approved more than 2,400 refinancings for over $2.2 billion to small businesses.
In November 2012, Granite State Economic Development Corporation’s Scott Gardiner testified in support of reauthorizing the program, citing the “ongoing challenges in the commercial real estate market” and his firsthand experience working with small businesses in New Hampshire. Gardiner noted that there were nearly 400 applications representing over $424 million in small business loans that the SBA could not process due to the expiration of the program.
The Small Business Committee also approved the Expanding Access to Capital for Entrepreneurial Leaders (EXCEL) Act, the Communicating Lender Economic Activity Records from the Small Business Administration (CLEAR SBA), and the Small Business Disaster Reform Act, which includes an amendment offered by Shaheen to improve oversight of taxpayer dollars and crack down on waste, fraud and abuse. The amendment responds to a concern raised by the SBA’s Inspector General and requires the SBA to improve its oversight of the Economic Injury Disaster Loan program.
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