Chamber Applauds Senate Passage of SBA Loan Program--Removes Roadblocks to Help Small Businesses

WASHINGTON, D.C. – The United States Chamber of Commerce today applauded Senate efforts to restore $6 billion in access to capital for small businesses in fiscal year 2003 through the Small Business Administration's 7(a) loan funding program.

"Denying small businesses access to capital does not make sense," said Giovanni Coratolo, Chamber director of small business policy. "This legislation will remove the roadblocks many Americans face when trying to get loans for their small businesses."

The Chamber supports the Bond/Kerry legislation that requires the Office of Management and Budget to use the new econometric model this year in order to determine the cost of the program to the government. The use of this model in determining the subsidy rate, coupled with a residual funding program that was obtained last year by Senator John Kerry (D-MA), will provide a $12.8 billion program level, enough to satisfy anticipated demand for FY03.

According to a recent report by the Government Accounting Office, the cost of the 7(a) program alone has consistently been overestimated by the government. The Chamber led a coalition of thirty small business and banking organizations called the "Small Business Access to Capital Coalition" and challenged the federal government's accounting methods that had reduced SBA 7(a) lending by $6 billion this year. The Chamber also applauds Senators Kit Bond (R-MO) and John Kerry for their leadership and urges a speedy passage in the House.

"During this time of economic uncertainty it is important to provide small businesses with the tools they need to be successful," continued Coratolo. "We applaud the Senate's effort to ensure that entrepreneurs will have every advantage possible."

Anticipating this legislation to be a short term fix, the U.S. Chamber-led coalition will continue to examine government accounting for FY04, to assure that small businesses will not be restricted in their access funds or pay excessive fees.

The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector and region.

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