"Davids Looks to Empower Community Lenders to Reach Underserved Businesses"
Summary
A press release dated March 29, 2022 on a hearing of the House Small Business Committee Subcommittee on Economic Growth, Tax, and Capital Access under Chairwoman Sharice Davids (D-KS). The hearing examined the role of community lenders in Small Business Administration (SBA) programs and steps Congress can take to increase capital access in underserved markets. The release states that reforms in later phases of the Paycheck Protection Program (PPP) helped community lenders participate on equal footing with bigger banks and that the average loan size decreased substantially in later rounds. It names the 504/CDC Loan Program, SBA Microloan Program and Community Advantage Pilot Loan Program as delivered by community lenders, and quotes community lender witnesses on the SBA 504 and Microloan programs.
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Full text
Davids Looks to Empower Community Lenders to Reach Underserved Businesses March 29, 2022 Tags: Economic Growth, Tax, and Capital Access Washington, D.C.— Today, the House Small Business Committee Subcommittee on Economic Growth, Tax, and Capital Access under Chairwoman Sharice Davids (D-KS) held a hearing examining the role of community lenders in Small Business Administration (SBA) programs and steps Congress can take to increase capital access in underserved markets. “The ability of community lenders to reach underserved businesses should serve as an important lesson moving forward. Though the PPP portal closed last May, these community lenders can be a vital tool as we work to drive an equitable recovery,” said Chairwoman Davids. “By strengthening existing SBA programs that utilize community lenders, we can help ensure that all small firms have access to the capital they need to grow and thrive.” In later phases of the Paycheck Protection Program (PPP), Congress instituted reforms to help community lenders participate in the program on equal footing with bigger banks. These changes proved to be effective in increasing access to PPP for underserved businesses. As a result, in later rounds of PPP, more funding reached underserved markets and the average loan size decreased substantially, showing that more money went to the smaller businesses in need. Small firms also reported the highest-level of satisfaction with community-based lenders and small banks. In addition to pandemic relief programs, community lenders participate in several existing SBA programs. Programs like the 504/CDC Loan Program, SBA Microloan Program, and Community Advantage Pilot Loan Program are all delivered by community lenders. During the hearing, community lenders testified on their experience in SBA programs and the steps Congress can take to provide more capital to underserved markets. “We are proud of our milestones and contributions to help entrepreneurs and strengthen Illinois communities. Our story is one shared by many other CDCs that are also engaged in impactful economic development initiatives to help their respective local small business ecosystems,” said Manny Flores, President and Chief Executive Officer of SomerCor in Chicago, IL. “The national CDC network plays an integral role in helping bring more economic development resources to communities across the nation and has a positive track record, especially through the deployment of the SBA 504 program.” “A hallmark of the Microloan program is the ongoing technical assistance needed to help underserved entrepreneurs succeed at every step of their business’s development,” said Kerry Doi, President and Chief Executive Officer of the Pacific Asian Consortium in Employment (PACE) in Los Angeles, CA. “The Microloan program serves small businesses that encounter difficulty in gaining access to from conventional lenders. By serving entrepreneurs that operate start-up and new businesses, lack sufficient collateral, or have limited or poor credit histories, the SBA Microloan program fills a gap in the private market.” Related News Statement of the Hon. Greg Landsman on American Ingenuity: Promoting Innovation Through the Tax Code June 6, 2023 | Posted in Committee News Statement of the Hon. Greg Landsman on The End of Relationship Banking? Examining the CFPB's Lending Rule March 28, 2023 | Posted in Statements Landsman Pushes for More Equitable Lending for Underserved Small Businesses March 28, 2023 | Posted in Press Releases Davids Works to Boost Small Business Exporting July 19, 2022 | Posted in Press Releases Statement of the Hon. Sharice Davids on The SBA Office of International Trade and the STEP Program as Key Tools for Recovery and Expansion July 18, 2022 | Posted in Press Releases
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