Senator John Kerry sent a letter today to the House and Senate Appropriations Committees asking that they retain two amendments to lower fees on small businesses loans in their conference report funding the Small Business Administration (SBA).
Also signing the letter were nine other senators who share Kerry’s concerns that the Bush Administration has dramatically raised the cost of loans through the SBA’s largest loan program.
“As any entrepreneur will tell you, access to capital remains a top obstacle for small businesses in this country. There’s a reason Congress opposes the Bush Administration’s continued attempts to raise the cost of SBA loans — because it’s bad for for small businesses. I’m going to continue to fight these increases every time they try. It just doesn’t make sense for our small business owners or our economy,” said Kerry, top Democrat on the Committee on Small Business and Entrepreneurship.
In last year’s budget request, Bush eliminated all funds for the SBA’s 7(a) loan program and shifted the cost to the lenders and small business borrowers. In addition, the budget revealed that a new accounting system at the SBA charged borrowers and lenders an extra $42 million in fees. In response, the House and Senate passed language to address the rising cost of small business loans.
In September, the Senate passed its version of the Commerce, Justice, Science Appropriations bill, which included Kerry’s amendment requiring the Administration to lower fees on the SBA’s 7(a) loans instead of continuing to overcharge borrowers. The House legislation included an amendment to restore public funding for the 7(a) loans.
“Without a sufficient appropriation, it is probable that the program’s fees will be further increased, that a cap will be imposed on loan size, or, in the worst case, that the program will be shutdown all together,” the Senators wrote.
Also signing the letter with Kerry were Senators Harry Reid (D-Nev.), Evan Bayh (D-Ind.), Jeff Bingaman (D-N.M.), Mark Pryor (D-Ark.), Carl Levin (D-Mich.), Tom Harkin (D-Iowa), Joe Lieberman (D-Conn.), Byron Dorgan (D-N.D.), and Maria Cantwell (D-Wash.).