STATEMENT
of the
Honorable Nydia M. Velázquez, Ranking Democratic
Member
House Committee on Small Business
Press Conference on Funding for 7(a) Loan Program
July 7, 2004
As the Ranking Democrat on the House Small
Business Committee, I always hear - whether we are in good
economic times, or in bad - that small business owners need
access to affordable capital in order to be successful.
That is why I always say access to capital
is access to opportunity in this country. A few weeks ago,
small business owners from across the country gathered here
on Capitol Hill, and spoke to us first hand about the challenges
and the hardships they face today.
These entrepreneurs talked to us about their
problems accessing capital. They told us stories of having
to max out credit cards, having to borrow money from relatives,
and having banks ask them to put their homes on the market
to afford a $20,000 computer loan.
These are the real challenges facing small
enterprises - and this is the whole reason small business
loan programs - such as 7(a) - were created. The 7(a) program
creates a public and private partnership - for banks, lenders
and small businesses.
The 7(a) program is this country's largest
source of long-term small business lending for both the
private and public sector - providing 30 percent of this
nation's long term loans.
Given its tremendous success over the years,
it is unbelievable to me that this critical loan program
has been under nothing but attack from the Bush administration.
This is the same administration who claims to be the champion
of small business!
The first thing this administration did 4 years ago was
to eliminate funding for the 7(a) program. Then earlier
this year, the 7(a) program was shut down - and this happened
because the Bush administration ignored Congress's warning,
and they ignored the industry. They simply chose to ask
for less funding than what this loan program requires.
Now, today we face a new issue for the 7(a)
program. This same administration wants to zero-out the
program's funding, and let small businesses and lenders
pay more. We heard small business owners say this was unfair
- and we promised to do something about this.
Well that is what we are doing today - delivering
that promise to our small businesses. What is so ironic
is we are talking about a successful small business lending
program here!
For every 60 cents - the 7(a) program provides
$100 in loans. They have continually done more with less.
A decade ago, they received $300 million in the appropriations
process, and now we are asking for only one third of that.
The most unfortunate part is that over the
past ten years, the 7(a) program has managed to do more
for small firms in an environment where they were being
overcharged by the government. We fixed this problem in
a bipartisan manner in 2001 - but the Bush administration
wants to go back to the days when small businesses were
taxed.
Well, let me tell you - it is not what our
nation's small businesses want, and it is not what we want.
Our hope today is that this amendment passes, which would
allow the program to do record volumes with the same amount
of money.
It is the small business owners who use the 7(a) program
that serve as anchors in this economy. The truth of the
matter is - this is an outstanding loan program, and this
is the right thing to do. If we want our nation's small
businesses to continue creating the jobs we so desperately
need - then it is in everyone's best interest to provide
them with the access to capital that they need.
