Legislators Agree They Want to Attract Small Biz Lenders, but Disagree on Best Way

WASHINGTON – As if it wasn’t enough that members of Congress are debating creating a new regulatory agency possibly under Treasury to regulate the housing Government Sponsored Enterprises Freddie Mac and Fannie Mae, now the current front runner in the Democratic presidential nomination race, former Vermont Gov. Howard Dean, has proposed creating a Fannie Mae-like corporation to sell securities backed by small business loans. The so-called Small Business Capital Corp. Dean has proposed would start out being part of the Small Business Administration, but within 15 years it would be converted to a private-sector company which would provide it with additional resources accessible through a public offering of stock. The SBCC would be responsible for increasing the availability of capital to small businesses. Meanwhile, Sen. Olympia Snowe (R-Me.), chair of the Senate Committee on Small Business and Entrepreneurship in July, introduced legislation S. 1375, “The Small Business Administration 50th Anniversary Reauthorization Act of 2003″ that included provisions that improve the credit and venture capital resources for small enterprises through the SBA 7(a), 504, and Microloan programs, as well as the SBIC, New Markets Venture Capital, and Surety Bond programs. The measure also contains provisions to improve the SBA’s procedures for overseeing lenders participating in SBA credit programs. Specifically, a major component of the measure calls for the SBA to initiate a three-year pilot program in which Preferred Lender Program (PLP) lenders can receive authorization to operate in every state as a National PLP lender if the lender meets criteria established by the SBA. S.1375 also increases the maximum size of SBA 7(a) loans that are available to small businesses involved in exporting products from $2 million to $2.6 million, with a maximum guaranteed amount of $1.3 million; and increases the ability of small businesses to receive investments from an SBIC while also receiving loans under either the SBA 7(a) or 504 Loan programs. “I hope that this reauthorization bill will lead to a renewed SBA, rededicated to improving the environment – or level the playing field – for small business ownership in America,” said Snowe. -