Includes Increased Size, Scope of SBA Loans, Cutting Red Tape to Promote Innovation, Entrepreneurship
Incorporates Ideas, Input of Colorado Small Business Owners and Entrepreneurs from Across State
Washington, DC – After holding several meetings with small business owners, entrepreneurs and lenders from across the state, Michael Bennet, U.S. Senator for Colorado, today unveiled a working blueprint for helping Colorado small businesses grow, create new jobs and keep our economy on the road to recovery.
With Congress expected to take up new efforts to support small business in the coming weeks, Bennet’s working blueprint contains a number of priorities he believes must be included in the package to ensure small businesses have the resources they need to grow and create new, good-paying jobs.
Specifically, Bennet is pushing for a temporary increase in the size and scope of Small Business Administration (SBA) loans, waiving unnecessary restrictions on SBA’s microloan program, and cutting red tape that hampers small businesses and entrepreneurs.
“We need to support the small businesses and entrepreneurs that will create jobs and get our economy moving again,” said Bennet. “But in this savage economy, small businesses are struggling to stay afloat, let alone hire new workers as lending has come to a halt. We have to get flywheel spinning again so that small businesses have access to the lines of credit they need to grow, create jobs and help our economy recover.”
In several roundtable meetings and discussions, Bennet has heard from small business owners frustrated by their inability to access capital and lending. His working blueprint begins to address these concerns by enlisting the lending power of the Small Business Administration (SBA) to step in to address the credit crunch. Bennet plans to unveil other additional initiatives as part of his blueprint in the coming weeks.
Specifically, Bennet’s working blueprint for small business would:
Increase the Size of SBA Loans for Small Business Job Creators
Bennet’s blueprint would temporarily increase SBA guarantees loans that help small businesses access credit they need for both brick and mortar infrastructure [504] and operating capital [7(a)].
- Increases the limits on 504 loans from $1.5 million to $5.5 million.
- Increases the limits on 504 loans beyond $5.5 million for small businesses that are significant job creators within their communities;
- Increases the limits on 7(a) loans from $2 million to $5 million
- Increases the loan limit on microloans from $35,000 to $50,000 and
- Increases the maximum loan made to a microloan intermediary from $3.5 million to $5 million
Expand the Reach of SBA Loans
Bennet’s blueprint would make SBA loans available to community-based lenders, like Community Development Financial Institutions, or CDFIs, that provide financial services to businesses in communities that are underserved by traditional lending. The loans would be modeled after the SBA’s successful 7(a) guarantee program. Colorado currently has 12 CDFIs operating in the state.
Currently, such institutions are not eligible to obtain funding under the SBA’s guaranteed loans. Bennet is pushing to allow these loans to occur. CFDIs have experience identifying struggling businesses in underserved areas.
Waive Unnecessary Restrictions on the Microloan Program
The SBA’s Microloan program provides direct loans of up to $35,000 to very small businesses through non-profit intermediaries. The intermediaries of such loans must provide a 15% match with the SBA’s funds.
Bennet’s blueprint would temporarily eliminate the requirement that an intermediary microlender provide a 15 percent, non-federal match on loan funds secured from SBA. This would enable such entities to provide more loans to struggling small businesses.
Cut Red Tape on Innovation
Small businesses are responsible for much of the new technologies and innovation that continue to move America forward. Providing more resources targeted at reducing the backlog for small inventors and entrepreneurs to the Patent and Trademark Office, which is experiencing a backlog of 700,000 applications, would provide a needed boost to small business inventors and innovators.
In 2009, those who submitted applications to the Patent and Trademark Office had to wait, on average, almost three years for a decision.