News From Congresswoman
Nydia M. Velázquez
Representing New York's 12th Congressional District - Brooklyn, Manhattan, Queens
Ranking Democratic Member, House Small Business Committee

For Immediate Release
January12, 2004

Contact: Wendy Belzer, Kate Davis(202) 225-2361

Democrats Call on Administration to Reopen Small Business Loan Program
Velazquez leads charge, demands Bush meet the capital needs of small business

WASHINGTON - Congresswoman Nydia M. Velázquez (D-N.Y.), Ranking Member of the House Small Business Committee, today in a letter to the White House signed along with her Democratic colleagues, called on the Bush administration to "act swiftly to resolve the crisis and reopen the loan program so that America's entrepreneurs do not continue to suffer."

In an unprecedented move last week, the Small Business Administration (SBA) issued a policy notice marking the agency's shutdown of its most important lending initiative - the 7(a) loan program - as pending applications were to be returned to small business owners across the country. This came shortly after the SBA announced a cap of $750,000 in late December on the 7(a) loan size.

"These actions have seriously and irreversibly injured thousands of small companies at a time when the nation's economy is struggling to create new jobs and move forward," Congresswoman Velázquez and Committee Democrats wrote to President Bush. "Most disturbing about this occurrence is throughout 2003 your administration repeatedly ignored signs that loan demand was exceeding SBA's available funds and chose not to act, instead delaying action until Congress adjourned for the year. Rather than preventing this crisis, one of the federal government's most important economic development programs was shut down."

Congresswoman Velázquez and her Democratic colleagues on the Committee demanded immediate action to get the program up-and-running again by pushing the White House to reprogram any and all available funds. In addition to pressuring the Bush administration to make a supplemental appropriation request to ensure that demand for 7(a) loans can be met in the future, Velázquez also requested that those small business owners who were awaiting action on applications during the shutdown be given priority once the program resumes.

"If the SBA does not honor its commitment, such action will undermine the standing of the program in the long-term and call into question the administration's integrity in operating its flagship loan program," Congresswoman Velázquez wrote. "Under no circumstances should the administration be permitted to shirk its responsibility to those small businesses that have been harmed by its decision to cease operations of the 7(a) loan program. Small businesses are responsible for driving job creation and contributing to positive economic growth. This is especially important now as recent reports confirm that the economy is failing to create new jobs. A real commitment from the administration to the small business sector would stimulate growth in communities across the country."
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