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4 Senate bills aimed at easing credit for small biz

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WASHINGTON—The U.S. Senate Committee on Small Business and Entrepreneurship is considering four bills to ease credit availability to small businesses.

Small Business Committee Chairwoman Mary Landrieu, D-La., the main sponsor of all four bills, held a roundtable hearing on them March 14.

The centerpiece of the quartet of bills is S. 415—the Small Business Disaster Reform Act of 2013.

The legislation has two major provisions. The first relates to collateral for Small Business Administration disaster loans of up to $200,000.

The first provision prohibits the Small Business Administration (SBA) from forcing small business owners to use their homes as collateral when they have other assets of the same or greater value as their homes that instead could be used as collateral.

The second provision allows the SBA to authorize Small Business Development Centers from outside of states declared disaster areas by the president to provide assistance to small businesses in those states, without regard to geographic proximity.

In introducing S. 415 on the Senate floor Feb. 28, Ms. Landrieu reminded her fellow senators that her state has been particularly hard hit by disasters, such as the Deepwater Horizon oil leak and a series of major hurricanes.

“We must ensure that the federal government is better prepared and has the tools necessary to respond quickly and effectively following a disaster,” she said.

The second in the quartet of bills is S. 511, the Expanding Access to Capital for Entrepreneurial Leaders (EXCEL) Act.

The EXCEL Act is designed to enhance the Small Business Investment Co. (SBIC) program within the SBA, Ms. Landrieu said March 11 on introducing the bill.

“The EXCEL Act is a bipartisan effort encompassing much-needed changes that will allow the SBIC program to meet growing demand and will make improvements so that more small businesses can access capital,” she said.

The SBA runs a venture capital program by guaranteeing money borrowed by SBICs, which are qualified investment funds that invest in small businesses, Ms. Landrieu said.

The EXCEL Act would raise the authorization level for the SBIC program to $4 billion from $3 billion, she said. It would also encourage successful SBIC investors by raising fund limits; improving transparency and accountability within the program; and promoting outreach, including a mandate to make the SBIC website more user friendly.

S.289, the Commercial Real Estate and Economic Development (CREED) Act, was introduced Feb. 12. This legislation would reinstate for five years a provision of the Small Business Jobs Act of 2010 that terminated on Sept. 27, 2012.

That provision gives the SBA, under its local development business loan program, the authority to allow low-interest financing of small business debt that doesn't involve business expansion.

Reinstating the low-interest financing provision would help spur job creation among small businesses, Ms. Landrieu said when introducing the bill. The economic downturn hit small business disproportionately, she said, and small business owners told her consistently that the provision needs to be reinstated.

The last bill, introduced March 12, is S. 537, the Communicating Lender Activity Reports from the Small Business Administration (CLEAR SBA) Act.

The CLEAR SBA Act would amend the Small Business Act to direct the SBA administrator to establish a public, user-friendly database of information related to lenders making loans under either the Small Business Act or the Small Business Investment Act of 1958.

Specifically, the bill requires the administrator to include information on loans made between fiscal years 2009 and 2013 and to incorporate information relating to those loans on an ongoing basis.

This bill would increase the SBA's accountability in its lending activities, Ms. Landrieu said in introducing the bill.

“While the SBA currently releases some information publicly about SBA lending activity, it is extremely difficult to find and comprehend if you are not an SBA lending professional,” she said. “If a small business, mayor or governor wants to determine SBA lending activity in their area, they lack the ability to do so easily.”

No further action has yet been scheduled on these bills, a Small Business Committee staff member said April 4.



To reach this reporter: mmoore@ crain.com; 202-662-7211.
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