Access to Capital
April 2004
NAWBO Position:
NAWBO supports federal legislation that overcomes the current barriers related to access of capital by women business owners (WBOs).
Background:
The Small Business Administration’s 7(a) loan program was suspended in January because of volume constraints within SBA funding, which had been designated by a series of short-term Continuing Resolutions since October 1, 2003. The funding was based on 2003 levels, which were lower than the needed levels for 2004.
NAWBO Efforts:
During Public Policy Days in March, NAWBO members visited with their legislators to encourage them to vote for the SBA reauthorization to pass an annual appropriation to keep the 7(a) loan program open.
Working with the U.S. Chamber of Commerce, NAWBO signed a coalition letter, which included WIPP (Women Impacting Public Policy) support, which was sent to Sen. Olympia Snowe (D-Maine), chair of the Senate Small Business Committee (see attached coalition letter).
Current Legislation:
On April 5, 2004, President George W. Bush signed legislation that will increase loan authority for the SBA’s 7(a) loan program by more than $3 billion.
The bill, HR 4062, passed the House in late March, and was passed by the Senate on April 1. This bill increases the 7(a)’s lending authority to $12.5 billion, allowing the program to reach up to 90,000 small businesses in FY 2004.
The legislation will also allow the SBA to remove the $750,000 cap on 7(a) loans, returning it to its previous $2 million level. Lenders will have the option to make SBA Express loans of up to $2 million; piggyback loans will once again be allowed.
This legislation reauthorizes the 504 loan program and the Small Business Investment Company program through the end of the fiscal year. The bill also guarantees that the SBA’s Small Disadvantaged Business and Preferred Surety Bond programs will remain in continual service through the end of June-both would have expired in early April without congressional action.
SBA Administrator Hector Barreto credited Senate Majority Leader Frist and Sen. Olympia Snowe for getting the 7(a) loan program back on track. “Senator Snowe understands that small businesses are America’s job creators,” Barreto said. “Her leadership was critical to the passage of this legislation.”
Sen. Snowe is the chair of the Committee on Small Business & Entrepreneurship and spoke to NAWBO Public Policy Days participants on March 2, 2004.
