As Small Businesses Struggle to Obtain Loans, Bennet Pushes Plan to Ease Credit Crunch on Main Street
Washington, DC - With small business struggling to obtain credit and create new jobs, Michael Bennet, U.S. Senator for Colorado, today announced his push to ensure Colorado's small business owners can access the lending they need to expand and hire new workers.
To help ease the small business credit crunch, Bennet is co-sponsoring the bipartisan Small Business Job Creation and Access to Capital Act, which includes provisions to increase Small Business Administration (SBA) loan limits and make its loans process work better for small business owners. The SBA estimates that the increased loan limits could increase small business lending by $5 billion over the next year.
Bennet's push comes on the heels of stories he has heard from small business owners across Colorado who are experiencing tremendous difficulty in their efforts to access credit to grow their operations and create new jobs.
"Small business owners across Colorado have told me they want to expand and create new, good-paying jobs, but without access to credit, they just can't," said Bennet. "An economic recovery begins and ends with small business, and we need to do everything we can to support their success. Working together, we can support our small businesses, create good-paying jobs on Main Street and keep our economic recovery on track."
The Small Business Job Creation and Access to Capital Act contains several critical provisions to boost SBA assistance to Colorado small businesses and aspiring entrepreneurs. Specifically, the bill would:
- Increase the limits on 7(a) loans from $2 million to $5 million: The 7(a) program provides flexible loan guarantees for existing and start-up small businesses.
- Increase the limits on 504 loans from $1.5 million to $5.5 million: This program provides guarantees for businesses to acquire real estate and other fixed assets.
- Extend the 90 percent guarantee on 7(a) loans until the end of 2010. The Recovery Act increased the guarantees on 7(a) loans to 90%. Prior to the Recovery Act, the SBA guarantees totaled either 75% or 85% depending on the size of the loan
- Extend the fee elimination on borrowers for 7(a) and 504 loans until the end of 2010. The Recovery Act eliminated such fees last year