(Washington, D.C.)–Congressman Jim Langevin today called upon the Administrator of the U.S. Small Business Administration (SBA) to immediately reinstate the SBA's bankrupt 7(a) loan program, a critical tool that assists with day to day operating costs for small businesses across the country.  Langevin also urged the SBA, White House and Congressional appropriators to ensure that sufficient resources are provided in the future to guarantee the program's solvency.  On a day when the Bureau of Labor Statistics is reporting that the new jobs created in December fell 305,000 short of the Administration's projection, the suspension of the 7(a) program could not come at a worse time.

 “Lending through the SBA loan programs currently represents a significant portion of all small business lending,” said Congressman Langevin, a former member of the Small Business Committee.  “The unexpected halt to the 7(a) program will deny assistance to entrepreneurs in search of capital to finance and expand their companies and will further burden job growth in a sluggish economy.  Rhode Island small businesses are critical partners in spurring economic growth, but without investment resources this cannot occur.”

 Langevin has appealed in writing to the White House's Office of Management and Budget, Congressional appropriators and the Small Business Administration to provide necessary funding and immediately reinstate a program that is responsible for the operation of small businesses and continued employment of thousands of Americans.

Recently, the SBA instituted a cap of $750,000 on all 7(a) loans, creating a dramatic increase in demand.  Last Friday, the SBA approved more than $115 million in loans even though they only had enough money for an average of $40 million per day.  This gap forced the SBA Administrator to abruptly halt the program on Monday, and no money was made available for loans already approved.

From October 1, 2002, to September 30, 2003, 25 different financial institutions in Rhode Island approved 1,065 7(a) loans for a total of over $71 million to Rhode Island's small business community.  These 7(a) loans comprise nearly one-third of all long-term loans made to U.S. small businesses, and the program is critical to the start-up success of small businesses across America.

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