Nydia M. Velazquez: “for many unemployed workers, starting a small company provides opportunities for career growth and financial success.…”

“for many unemployed workers, starting a small company provides opportunities for career growth and financial success. But the lack of access to capital prevents many entrepreneurs from starting their own business. The Small Business Administration's 7(a) loan program is a critical source of capital for small businesses, providing 30 percent of all long-term loans to U.S. entrepreneurs. Despite the success of the 7(a) loan program, the Bush administration has repeatedly underfunded it, implemented a series of caps, imposed burdensome restrictions, and shut down the entire program. In the latest attack on October 1, the President doubled the fees that small businesses must pay to receive a 7(a) loan. These new up-front fees are limiting the number of small businesses that can afford 7(a) loans. For a loan of $150,000, an entrepreneur must now pay nearly $3,000 in up-front fees, a significant cost for someone trying to start a company. These higher costs have significantly reduced small business use of the 7(a) program, as loan volume has decreased by $500 million since the new fees were implemented. The impact has been so great that this January the SBA made fewer loans than when the administration shut down the entire program last January. President Bush was wrong when he increased the burden entrepreneurs face in accessing capital. This amendment acknowledges the shortsightedness of that decision.”