House Passes Amendment Earmarking $40 Million for SBA 7(a) Program

WASHINGTON – An amendment that would provide $40 million for the Small Business Administration's 7(a) loan program passed in the House of Representatives June 27. The amendment was passed as an inclusion to the Science, State, Justice and Commerce Appropriations Act for Fiscal Year 2007. The measure, introduced by Rep. Nydia Velzquez (D-N.Y.) and Ranking Democrat on the House Small Business Committee, passed with a vote of 214 to 207. The 7(a) loan program has been operating under a zero subsidy for the past two years. As a result, Velzquez counters, entrepreneurs have had to pay additional upfront fees from $1,500 to $3,000 for smaller businesses to more than $50,000 for larger businesses. SBA has said 7(a) loan volume doubled to 88,912 loans last year and as of June 2, the agency had approved 65,814 loans totaling $9.68 billion. The guaranty fee on loans up to $150,000 is the same 2% it was in 1985 and the fee on the largest loans, at 3.5%, is the lowest it's been since 1995, according to SBA. The Senate is expected to take up the bill in July but it might not be seen until September, said Kate Davis, a spokeswoman from Velzquez's office.