Committee Markup of Small Business BillsJune 10, 2015
Today, Wednesday, June 10, the House Committee on Small Business is holding a markup to consider four legislative measures: the Veterans Entrepreneurship Act of 2015 (H.R. 2499), the Superstorm Sandy Relief Act (H.R. 208), the Small Business Investment Company Capital Act of 2015 (H.R. 1023), and the Microloan Modernization Act of 2015 (H.R. 2670).
The Veterans Entrepreneurship Act of 2015, introduced by Chairman Steve Chabot (R-Ohio), would help veterans in starting their own small businesses by removing barriers to capital. The legislation amends the Small Business Act to waive the upfront guarantee fee for a U.S. Small Business Administration (SBA) 7(a) express loan. This increased access to private capital would subsequently apply to both veterans and the spouses of veterans in starting a small business.
The second measure being considered is the Superstorm Sandy Relief Act introduced by Ranking Member Nydia Velázquez (D-N.Y.) which would reopen the SBA’s Disaster Loan Program to help small businesses and firms still struggling from the aftermath of the storm. Specifically, the bill would require the Administrator of the SBA, Maria Contreras-Sweet, to reestablish the loan program under which a small business, homeowner, or renter who was relocated within a declared major disaster area during Superstorm Sandy in 2012 may apply for a disaster loan. These loans could be used to repair or replace property damaged or destroyed because of the storm, or assist a small business that suffered substantial economic injury because of it.
Next, the Small Business Investment Company Capital Act of 2015, introduced by Chairman Chabot and Rep. David Cicilline (D-R.I.) is being taken up. This bill would increase from $225 million to $350 million the maximum amount of outstanding leverage to be made available by the SBA to two or more commonly controlled Small Business Investment Companies (SBIC) that have been consistently successful. The SBIC is a key source of early funding for entrepreneurs, while also providing a feasible alternative for small businesses to obtain capital when traditional lending methods have not been viable.. If this leverage cap were raised, SBICs would substantially increase new small-business investing per year. Ideally, this would lend itself to heightened entrepreneurial activity and small-business ownership.
Finally, the committee is marking up the Microloan Modernization Act of 2015 introduced by Rep. Seth Moulton (D-Mass.) which would amend the Small Business Act to provide for expanded participation in the microloan program. The legislation would do this specifically by allowing for intermediary lenders to apply for fee waivers, increase the microloan-lending limit, and extend repayment terms for loans to small businesses. This would provide more incentive and security for both lenders and small businesses to participate. The Microloan program provides loans up to $50,000 to help small businesses start up and expand, with average microloans of roughly $13,000. The loans can then be used for working capital, inventory, supplies, furniture, machinery, or equipment, among other functions in small business operations.
It is uncertain at this time whether these four measures will be considered on the House floor in the near future.