December 17, 2004
On December 17, President Bush signed legislation making more than $21 billion available to small businesses through the Small Business Administration's (SBA's) two main loan programs. The legislation also reauthorizes the agency's programs and provides a $580 million budget for fiscal year 2005.
The SBA's flagship 7(a) loan guarantee program was boosted to a $16 billion level, $3.5 billion above what the program provided last fiscal year, when a record $12.55 billion in financing was made to small business. Additionally, the government loan guarantee increased from $1 million to $1.5 million, and the program now will operate without a congressional appropriation or at zero subsidy, meaning that the program will be self-supported through modest fees paid by lenders and borrowers.
An additional enhancement to the 7(a) program was Congress' action to make the SBAExpress program permanent, raising the maximum loan size to $350,000 with a 50 percent government guarantee.
"I would like to thank Sen. Bill Frist (R-TN), Speaker Dennis Hastert (R-IL), and Small Business Committee Chairs Sen. Olympia Snowe (R-ME) and Rep. Don Manzullo (R-IL), and our banking partners for working with the administration to strengthen the 7(a) program," said SBA Administrator Hector V. Baretto. "This is an important win for small businesses and will ensure long-term stability to the program."
Congressional action included expanding the agency's 504 loan program up to the $5 billion level and raising the maximum loan size for manufacturers to $4 million. The 504 loans may be used for purchasing real estate, buildings, and machinery.
Other highlights in the bill include $3.250 billion for SBIC debenture financing and funding for the microloan and HUBZone programs. The SBA's disaster program, instrumental in the assistance provided after the 2004 hurricanes, previously received supplemental funding.
In the area of entrepreneurial development, the Small Business Development, SCORE, and Women's Business Centers were reauthorized and funded at the same levels as last year. The bill also provides funding for the veterans and Native Americans programs.