US House Approves Bill To Cut Capital Costs For Small Firms

by Leroy Baker, Tax-News.com, New York

30 April 2007

The US House of Representatives has acted to address concerns over the increasing costs of access to capital for small business by passing a bill that which lowers the cost of financing for these firms by modernizing SBA lending initiatives.

According to Nydia M. Velazquez, Chairwoman of the House Committee on Small Business, the Small Business Lending Improvements Act of 2007 would allow entrepreneurs to invest further in their ventures and create jobs.

“Access to capital is vital to the success of small firms in every region, industry, and sector,” she said. “The passage of H.R. 1332 during National Small Business Week illustrates the significance of affordable capital to entrepreneurs and the importance of their vitality to the US economy.”

A survey released by the National Small Business Association (NSBA) last week found that access to capital remains a top priority for the nation’s 26 million small business owners.

Velazquez says the Small Business Lending Improvements Act would expand financing options for start-ups in rural areas and emphasize outreach to healthcare providers in order to address increasing demand for medical providers in rural and low-income areas. The bill also establishes a program to help more veterans returning from Iraq and Afghanistan to start their own ventures by reducing borrower and lender fees and increasing loan guarantees. Changes were also made to the 504 loan program, strengthening its ties to local communities and allowing borrowers to receive both a 504 loan and a 7(a) loan.

“The Small Business Lending Improvements Act is going to infuse our small businesses with the capital they need to start and grow successful ventures,” Velazquez added. “Small businesses have had to pay increasing costs to access what was intended to be affordable financing for far too long now. Today, with this bipartisan effort, entrepreneurs will see some relief.”

The bill is part of the House Democrats’ 'Innovation Agenda,' which was introduced last week.

“America’s ability to innovate is our greatest strength and one of the foundations of our economic resiliency,” stated Rep. Melissa Bean, chair of the Subcommittee on Tax and Finance, who introduced the legislation. “To maintain their competitive edge, leadership countries should follow the example of leadership companies. Toward that end, our Innovation Agenda promotes development of a best-in-class workforce and utilization of available technology to find and exploit emerging market opportunities. I’m particularly proud that this agenda includes my legislation to improve access to capital for small businesses, which are the driving force of innovative ideas, new product development, and economic growth.”

The bill is supported by the American Community Bankers, Independent Community Bankers of America, American Veterans, Credit Union National Association, National Small Business Association, Veterans of Foreign Wars, American Bankers Association, US Women’s Chamber of Commerce, US Hispanic Chamber of Commerce, and the American Dental Association.

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