Small Business Lending Reauthorization & Improvements Act

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    History of the Bill

    • The Small Business Lending Reauthorization and Improvements Act was a bi-partisan bill introduced in the 110th U.S. Congress. The bill's sponsor was Sen. John Kerry (D-MA), however, he gained co-sponsors from both sides of the aisle, including Sen. Mary Landrieu (D-LA) and Olympia Snowe (R-ME). Introduced on May 1, 2007, the bill was referred to a committee. (See References 1) According to GovTrack, the committee reported on the bill on May 16, 2007, however it was never given an up or down vote, and therefore never made it to the Senate floor.

    Bill Doesn't Always Mean Law

    • In reality, the majority of legislation introduced to Congress will never become law. The fate of the Small Business Lending Reauthorization and Improvements Act of 2007 was no different. The last hearing for the bill, according to GovTrack, took place April 16, 2008, in the Committee on Small Business and Entrepreneurship. Although both the Chairman and Ranking Member of the committee were co-sponsors of the bill, they could not lift it out of committee hearings, and the bill was dissolved at the end of the 110th congress.

    Microloan Program

    • The Small Business Administration (SBA) oversees thousands of microloans to start-up businesses. The proposed bill would have raised the average microloan amount from $7,000 to $10,000, according to the Congressional Research Service. It would have also included persons who suffer from disabilities, therefore qualifying them for small business microloans, since they were not explicitly covered prior. Within the Microloan Program, the SBA would have also been given responsibilities over the PRIME program, stipulating that at least 50% of available program funds must be used to benefit very low-income persons, according to the Congressional Research Service.

    Intermediary Lending Pilot Program

    • The Intermediary Lending Pilot Program was proposed in the section section of the Small Business Lending Reauthorization and Improvements Act of 2007. It would have created a three-year pilot program to allocated funds from the SBA to designated nonprofit intermediaries. According to the Congressional Research Service, these nonprofit intermediaries would then "make fixed-interest-rate mid-size loans to startup, newly established, and growing small businesses." The program would have been limited to $1 million per nonprofit intermediary, with loan interest rates of 1 percent for a maximum of 20 years.

    Loan Program

    • The Small Business Lending Reauthorization and Improvements Act also made significant changes to the loan programs of the Small Business Act. The new bill aimed at creating a "preferred lenders" program, which would qualify certain lenders to service small business loans. It also would increase the maximum small business loan from $2 million to $3 million. According to the Congressional Research Service, small businesses would also be able to receive the maximum in small business loans, then also qualify for a 504 loan, part of a loan program within the provisions of the Small Business Investment Act of 1958.

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