José E. Serrano: “Mr. Speaker, the bill before us provides for a 1-month extension of the Recovery Act small business lending program and…”

“Mr. Speaker, the bill before us provides for a 1-month extension of the Recovery Act small business lending program and provides an additional $40 million for this program. Through March 12 of this year, the small business lending program has supported nearly $23 billion in small business lending which helped create or retain over 560,000 jobs. The program eliminated the fees that borrowers and certain lenders are normally charged for loans through the Small Business Administration's 7(a) and 504 loan programs. The Recovery Act also increased the government's guarantees on the 7(a) loans from 75 percent to 90 percent. Mr. Speaker, 7(a) is the SBA's primary program for helping startup and existing small businesses with financing guaranteed for a variety of general business purposes. SBA does not make loans itself but rather guarantees loans made by participating private lending institutions. Like most commercial loans, these loans are typically variable rate. The 504 program provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings, through Certified Development Companies. A Certified Development Company, CDC, is a private, nonprofit corporation set up to contribute to the economic development of the community it serves. When credit markets froze in late 2008, credit markets that service small businesses froze as well and have continued to be hard hit.”