FOR IMMEDIATE RELEASE:
October 29, 2009
Contact: Jake Rubin
KAGEN VOTES TO HELP SMALL BUSINESS CREATE JOBS
(WASHINGTON, DC) Congressman Steve Kagen, M.D. is working hard to give small businesses access to the loans and investment dollars they need to expand and grow. Kagen voted for The Small Business Financing and Investment Act today. By comprehensively updating the capital access programs of the Small Business Administration (SBA), the legislation is expected to support $44 billion in lending and investment for small businesses.
“This bill has in it a number of programs that will strengthen the positions of the Small Business Administration in helping our small businesses,” said Kagen. “Small businesses create over 60% of new jobs every year, but right now frozen credit is making it difficult them to get the financing they need. This is an opportunity that gives borrowers the chance to have access to the credit that they require to grow their business at a price they can afford to pay.”
The legislation will increase loan sizes to better meet businesses’ needs. It also includes incentives to encourage local banks to lend to small businesses and reduces bureaucratic red tape, making it easier for entrepreneurs to secure credit. The bill creates a new public/private partnership to expand investments in small business startups – an important source of job creation. It also extends critical Recovery Act provisions eliminating fees on SBA loans and guaranteeing up to 90% of 7(a) loans. To foster a diverse mix of businesses, it takes steps to promote veteran-owned, women-owned and rural small businesses.
Kagen outlined the programs in The Small Business Financing and Investment Act on his weekly 8th District Telephone Press Conference this week.
Included in the bill is The Capital Backstop Program which requires the SBA to establish a program where potential borrowers can submit loan applications directly to the SBA. The SBA would engage in application processing and preliminary underwriting of these loans. SBA would then forward these loan proposals to all private sector SBA lenders within 100 miles of the borrower, then statewide and finally preferred SBA lender nationwide. After 60 days, if no private lender bites, the SBA is authorized to underwrite, close and fund the loan.
“This a program that would be financed completely through the subsequent sale of the loan and collection of the lending fees. We are taking action to put our economy on the road to recovery. Everyone understands this will take time to succeed, but we are moving in the right direction,” said Kagen.
The Congressman also mentioned The Rural Lender Outreach Program which creates a program to focus on lending to small businesses located in rural areas saying, “In an area like Northeast Wisconsin this could become very important.”