House Bill Introduced to Modernize SBA Loan ProcessSeptember 24, 2014
On Sept. 18, House Small Business Committee Chairman Sam Graves (R-Mo.) introduced the Small Business Loan Simplification Act of 2014 (H.R. 5599), which would streamline and simplify the loan application process at the U.S. Small Business Administration (SBA) by requiring the agency to permit the use of e-signature and electronic records.
“Access to capital continues to be a major issue for many small businesses and people trying to start new companies,” said Chairman Graves, “A lengthy and complicated loan application process is often a great impediment for many small businesses to secure the capital they need to get their products or services to market.” Reps. Steve Chabot (R-Ohio), David Schweikert (R-Ariz.), Richard Hanna (R-N.Y.), Tim Huelskamp (R-Kan.), and Chris Collins (R-N.Y.) are original co-sponsors.
NSBA welcomes technological enhancements that will help speed up the SBA loan application process, and make it easier and less time-intensive for small firms. As the nation’s small-business lending market is slow to recover, small firms continue to face challenges with securing the financing they need to grow. According to the Federal Deposit Insurance Corporation (FDIC) small business lending is still below pre-recession levels, as of March 2014 small business loans are at $585 billion, as compared to $711.5 billion in June 2008, showing a decline of 18% percent. Therefore, such reforms to the SBA loan process are vital to ensure small businesses thrive.
Modernizing the SBA loan application process, H.R. 5599 would permit participants in SBA financing programs, both borrowers and lenders, to use electronic signatures and records in the certification and transmission of documents. This legislation, which comes at the same time as SBA efforts to streamline and simplify their loan process, also directs the SBA to accept electronic signatures and records associated with the management of its financing programs. By implementing this widely used and established e-signature and records technology, H.R. 5599 would keep the agency in line with society’s technological pace by offering proven services already being used by private lenders and other federal agencies.
NSBA enthusiastically supports H.R. 5599, and looks forward to working with Chairman Graves (R-Mo.) to help enact this critical piece of legislation.
Please click here to read NSBA’s letter of support for the Small Business Loan Simplification Act of 2014.