Small business owners could get billions of dollars in new proposal
This article first appeared in Business Journals’ website.
A $ 25 billion proposal recently approved by the US House Small Business Committee would boost a number of Small Business Administration grant and loan programs.
The package will be included in the estimated $ 3.5 trillion “Build Back Better” legislation crafted by Democrats in both houses and designed to be passed through a process called reconciliation, which requires only simple majorities in both houses. of Congress.
One of the most important items included in the House Small Business Committee legislation is $ 9.5 billion to create a program to provide “patient capital” to underserved markets and critical industries such as child care. ‘Children, Manufacturing and Infrastructure, which will be titled Venture Small Business Investment Companies. program.
The legislation also provides $ 4.465 billion over 10 years to fund a new direct lending product under the SBA’s current 7 (a) loan program, which currently uses a network of banks to provide loans that are then guaranteed by the SBA.
“Small businesses are the foundation of our economy and ultimately the key to a full economic recovery of our country,” committee chair Nydia VelÃ¡zquez, DN.Y., said in a press release. Thursday announcing the passage of the legislation out of committee. . âThe small business policies we have proposed today represent a generational investment in American entrepreneurs and will help businesses recover from Covid now and thrive in the future.
- $ 35 million in funding for training veterans in federal procurement entrepreneurship
- $ 1 billion in funding for an Improvement Accelerator Program and Business Development Academy at Historically Black Colleges and Universities (HBCUs) and Institutions Serving Minorities (MSI) for under-represented small businesses
- $ 1 billion to establish a national network of business incubators
- $ 20 million to improve the SBA’s Office of Native American Affairs
- $ 600 million to improve, enhance and expand the SBA’s Community Advantage program
- $ 500 million to fund a pilot program that allows co-ops and businesses owned by eligible employees to receive SBA loan products without the requirement of a personal or entity guarantee
- $ 2.746 billion to establish a direct lending sub-program under the 504 / CDC loan program to enable community development corporations to provide loans to small entrepreneurs, small manufacturers and small businesses in markets under-represented
- $ 100 million to invest in entrepreneurial training initiatives for former incarcerates
We do not know how many – and what proposals – will be part of the democratic reconciliation package and whether this package will ultimately be adopted by Congress. Democrats have no room for error in the Senate, and Senator Joe Manchin, DW.V., has posted a laundry list of requests to gain support for what could be a much smaller version of the legislation.
Rank member Rep. Blaine Luetkemeyer, R-Mo., Called the hearing to pass the legislation “shame and shame” and highlighted a number of amendments Republicans were seeking to add to the bill. legislation, which were rejected.
âIn an age when small businesses work tirelessly to get back on their feet and serve their communities, Democrats are spending billions of dollars in reckless spending and leaving Main Street USA with their bills. It is our duty on this committee to provide much needed relief to struggling small business owners in the most responsible and efficient way possible, âsaid Luetkemeyer.
Senator Ben Cardin, D-Md., Chairman of the Senate Small Business Committee, said in a statement Thursday that the comprehensive reconciliation bill was a “unique” opportunity to create jobs and rebuild the country.
“This budget will invest $ 25 billion in American small businesses over the next 10 years and give them the resources they need to help rebuild our nation’s infrastructure,” Cardin said. “I look forward to working with my colleagues over the next few weeks towards the final passage of the budget, as well as the bipartite law on investment in infrastructure and jobs.”
The Infrastructure Investment and Jobs Act, passed by the Senate on a bipartisan basis and with around $ 1 trillion in projects, would be funded in part by cutting funding for small grant and loan programs. existing SBA Covid-19 companies. The cuts come in the form of âcancellations,â which is when Congress recovers unused funds from a federal agency or program, and which have been reviewed by The Business Journals. These cancellations include the $ 13.5 billion reduction in the SBA’s economic disaster loan program.
Meanwhile, the SBA is officially raising the cap on its economic disaster loan program to $ 2 million, the agency said Thursday. The SBA had quietly released a new interim final rule that took effect on September 8 that included a variety of other changes to the EIDL, and which the SBA hoped to get more companies to look to the program.