News From Congresswoman
Nydia M. Velázquez
Representing New York's 12th Congressional District - Brooklyn, Manhattan, Queens
Ranking Democratic Member, House Small Business Committee

For Immediate Release
April 2, 2004

CONTACT: Wendy Belzer, Kate Davis, (202) 225-2361

Velázquez Hails Senate Passage of 7(a) Bill
Small business loan program set to reopen at full capacity sometime next week

WASHINGTON - Congresswoman Nydia M. Velázquez (D-N.Y.), Ranking Member of the House Small Business Committee, today hailed the Senate passage of H.R. 4062 yesterday, clearing the final hurdle and paving the way for the Small Business Administration's (SBA) flagship 7(a) loan program to reopen and be fully operational as soon as early next week.

"The 7(a) loan program has fallen on hard times recently, being closed at the end of last year, only to be reopened this year with severe restrictions in place that negatively impacted so many small businesses," Congresswoman Velazquez said. "With the passage of H.R. 4062 by both the House and the Senate this week, we extend the agency and make this important loan program whole again."

The House passed H.R. 4062 on Wednesday morning, after Congresswoman Velázquez worked with industry officials, House leadership, and the Bush administration to broker an agreement that would get the loan program up-and-running again. With the Senate's quick action on the legislation yesterday evening, the bill now goes to President Bush, who is expected to sign it sometime next week.

This will allow the immediate removal of the $750,000 cap on 7(a) loans, returning to its previous
$2 million level. It will also lift the ban on lenders making combination, or "piggyback," loans to small businesses.

Most importantly, H.R. 4062 will give lenders a new tool for making larger loans to small firms, including manufacturers, by raising the guarantee fee from $1 million to $1.5 million. This fix will yield at least $12.5 billion in lending authority for SBA in FY 2004, allowing the program to reach up to 90,000 small businesses this year, and creating or retaining up to 500,000 jobs.

"At this time, when the economy is seeing little new job creation, we must be investing in our nation's small firms, which create the majority of new jobs for hardworking Americans," Congresswoman Velázquez said. "This bill is definitely a step in the right direction. Now, I look forward to working on getting the SBA reauthorization bill passed and signed into law."

H.R. 4062 also extends the SBA though June 4, and all the lending programs, including SBIC, 504 and the 7(a) through the end of the fiscal year.

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