Cantwell Votes with Key Committee to Pass Small Business Lending and Disaster Relief Bills

Small Business Committee passes bills to expand access to capital, and improve small business disaster loan program

WASHINGTON, D.C. – U.S. Senator Maria Cantwell (D-WA) helped pass legislation yesterday out of the U.S. Senate Committee on Small Business and Entrepreneurship to improve Small Business Administration (SBA) loan programs available to small businesses impacted by disasters. The Small Business Disaster Reform Act of 2013 (S.415) now heads to the Senate floor.

Last Thursday, Cantwell spoke in support of the act, which would give small businesses more flexibility to secure emergency loans after a disaster. Cantwell also highlighted the importance of disaster relief programs during a recent roundtable in Mount Vernon with Skagit County businesses.

“Small businesses are the engines that drive job growth and the American economy,” said Cantwell. “As we’ve seen in Skagit County, disasters can have a real impact on small businesses in a community. This bill will help small businesses recover from those disasters by giving them more flexibility to secure a loan.”

The Small Business Disaster Reform Act would require that for loans under $200,000, the SBA first seek business assets as loan collateral, prior to requiring a primary residence of the business owner to be used as collateral.

Cantwell also voted with the committee to pass an extension of the SBA 504 Refinance Program. The extension was included in the Commercial Real Estate and Economic Development (CREED) Act (S. 289). The program, which expired on September 27, 2012, helps small business owners improve cash flow by allowing refinancing under the SBA 504 loan program to lock in long-term mortgage payments at lower rates. In fiscal year 2012, before the program expired, 74 SBA 504 refinancing loans were issued in Washington state worth $79 million.

The committee also passed bills by voice vote to improve public access to information regarding SBA lenders (S.537) and to make changes to the Small Business Investment Company program (S. 511).

A complete transcript of Cantwell’s remarks from last Thursday’s hearing follows.

Thank you Chair Landrieu, and thank you to the Ranking Member for holding this important markup today. 

As America recovers from the largest economic downturn since the Great Depression, it is imperative that we in Congress focus on helping small businesses – the backbone of America.

So I thank the Chair for her leadership on these issues and diligence in making sure we continue to support small businesses.

To that end, I want to briefly highlight two provisions which I hope members of the Committee will support in today’s markup.

The first – the Small Business Disaster Reform Act – is particularly important to help our small businesses recover from economic injury and disaster. 

It makes reforms to the program by adding flexibility for small businesses on collateral requirements – so that America’s small business owners have more options on how to secure a loan after a disaster.

At the same time, it should be noted that this bill will not reduce the collateral that SBA requires. 

And I’m sure many of you saw on the news on May 23 a major bridge in my state on I-5 collapsed after being struck by an oversized load.                              

A temporary span will be open as early as next week. And I just had a call with Secretary LaHood this morning on releasing $15 million for a permanent replacement. But last Friday I held a roundtable in Skagit County with impacted businesses and the Small Business Administration (SBA) to discuss ways the federal government can help. 

It was a productive discussion, and I’m encouraged to see that state, federal, and local agencies are working together. 

Our state emergency management department is still collecting information for the SBA from impact – but the closure in the area of I-5 and the resulting detours really do impact small businesses.

So the reason I’m bringing this up obviously is my state hopes to submit to the SBA in the coming weeks the Economic Injury Disaster Loan program that we are here improving today.  So I can tell you in real terms this is very important legislation.

The other thing I’d like to mention is the 504 Refinancing Bill we are considering, which re-establishes the ability for small businesses to refinance the existing debt under the popular SBA 504 loan program.

I prefer, though, to describe it like one of my lenders in my home state put it: 504 Debt Refinancing saves jobs.” 

Before the program expired at the end of fiscal year 2012, lenders in my home state issued 74 504 Refinancing loans worth $79 million.

Plain and simple, this program will help reduce small businesses’ monthly mortgage payments at no cost to taxpayers – keeping money in the pockets of small businesses.  That’s why I am happy to support the CREED Act.

I’d like to again thank the Chair and Ranking Member for their work on behalf of small businesses. These are critical issues that may not make the headlines every day but I guarantee you these small businesses are what are keeping America’s job growth and hiring people going. So thank you for your diligence.