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Bipartisan bill from Coons, Risch, Shaheen would keep 7(a) loans available to small businesses

Bill gives Congress flexibility to increase the limit on SBA 7(a) loans when demand is high

February 4, 2016

WASHINGTON – U.S. Senator Chris Coons (D-Del.), Jim Risch (R-Idaho) and Jeanne Shaheen (D-N.H.) today introduced the “Help Small Businesses Access Affordable Credit Act,” which would ensure that American small businesses are able to access affordable credit during periods of high demand for 7(a) loans.  
Specifically, the bill provides the Small Business Administration (SBA) with the flexibility to adjust the loan limit established by Congress each year if demand exceeds the limit.  In the previous two years, 7(a) lending reached the loan limit before the end of the fiscal year.  Last year, the SBA was forced to suspend new 7(a) loans until Congress passed legislation raising the limit, which disrupted small business lending.
“Small businesses are the backbone of our economy, and we should do everything we can to ensure that our innovators and entrepreneurs have access to affordable credit,” said Senator Coons.  “This commonsense bill will allow the Small Business Administration to continue to meet the high demand for loan guarantees without unnecessary disruptions.  Businesses should be focusing on expanding operations and creating jobs and that’s exactly what this legislation is designed to support. ”
“Access to capital remains one of the biggest challenges facing small business owners,” said Senator Risch. “The 7(a) program has helped provide billions of dollars to America’s small businesses, the engine that drives American job creation and our economy.”
“Small businesses are the backbone of our economy in New Hampshire and ensuring that they have access to credit is critical to helping them grow and succeed,” said Senator Shaheen. “We can’t risk letting essential SBA lending programs shut down due to Congressional inaction, which this legislation will help prevent.”
The 7(a) program is the SBA’s flagship small business loan program. It provides critical guarantees on loans to small businesses that often have difficulty qualifying for traditional loans. According to the SBA, in FY 2014, 7(a) lending created over 500,000 new jobs and supported  45,730 businesses. 
The Help Small Businesses Access Affordable Credit Act would:
  • Provide the SBA Administrator with the authority to increase the 7(a) loan limit in a fiscal year by up to 10%.
  • A request to increase must be sent to Congress 45 days in advance of exercising an increase.
  • House and Senate Appropriations Committees must approve the increase.
The 7(a) program operates on a zero subsidy basis, so adjusting the loan guarantee level will not result in additional cost to government.
The bill has been endorsed by the National Association of Government Guaranteed Lenders.