IV
105TH CONGRESS
1ST SESSION
H. CON. RES. 85
Expressing the sense of Congress that the Small Business Administration
should appoint a commission to examine the credit needs of small busi-
ness concerns.
IN THE HOUSE OF REPRESENTATIVES
MAY 21, 1997
Mr. LAFALCE submitted the following concurrent resolution; which was
referred to the Committee on Small Business
CONCURRENT RESOLUTION
Expressing the sense of Congress that the Small Business
Administration should appoint a commission to examine
the credit needs of small business concerns.
Whereas small business concerns are a vital part of the econ-
omy and provide most of the new jobs, new products, and
new services created in the United States;
Whereas adequate access to capital is a critical component of
small business formation, expansion, and success;
Whereas many small business concerns are unable to secure
access to credit without some type of Federal assistance;
Whereas access to capital is a particularly acute problem for
minority-owned businesses, women-owned businesses,
small businesses in economically distressed areas, and for
HCON 85 IH
those individuals without experience in owning and oper-
ating a small business concern;
Whereas the primary credit assistance program for general
purpose small business financing is the 7(a) loan guaran-
tee program of the Small Business Administration
(SBA);
Whereas the 7(a) loan program is now operating at a subsidy
rate of 2.5 percent as compared to twice that amount five
years ago, primarily due to quality improvement, reduced
administrative costs, and the imposition of higher user
fees;
Whereas despite these improvements in the 7(a) program, de-
mand exceeds the annual program level permitted by the
amount of Federal dollars appropriated to support the
program, thereby necessitating administrative action to
eliminate otherwise eligible loan applicants twice in the
past three years, including as recently as May 5, 1997;
Whereas a major source of credit assistance for plant and
equipment financing by small businesses is the certified
development company or 504 development company guar-
antee program of the Small Business Administration;
Whereas the 504 program is now operating at a subsidy rate
of zero as compared to 0.5 percent five years ago, pri-
marily due to quality improvement, reduced administra-
tive costs, and the imposition of higher user fees;
Whereas the 504 program will cease operations at the end of
this fiscal year unless legislation is enacted to extend user
fee charges; and
Whereas the appropriation of additional Federal monies to
expand the 7(a) loan program or mitigate the fees now
HCON 85 IH
imposed upon participants in the 504 program is very
difficult: Now, therefore, be it
Resolved by the House of Representatives (the Senate
concurring), That it is the sense of the Congress—
(1) the Administrator of the Small Business
Administration should appoint a blue ribbon com-
mission to examine the small business need for cred-
it and the ability of the Federal Government to as-
sist in meeting that need, both during the current
fiscal year and during future fiscal years;
(2) the commission should include individuals
with expertise in the delivery of financial assistance
to small businesses, and their associations, such as
the National Association of Government Guaranteed
Lenders, the Independent Bankers Association of
America, the American Bankers Association, the Na-
tional Association of Development Companies, and
small businesses which customarily use such pro-
grams, and associations which represent them or
provide other assistance to them, such as the Na-
tional Federation of Independent Business, National
Small Business United, the Chamber of Commerce
of the United States, and the Association of Small
Business Development Centers;
(3) the commission should also include rep-
resentatives of the Small Business Administration,
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but the commission should not be deemed to be a
Federal entity and thus should not be subject to the
customary restrictions imposed upon Federal enti-
ties, including the conduct of meetings or the need
for clearance or approval by the administration;
(4) the commission should evaluate the dispar-
ate credit needs of different types of small business
and their locale, and should examine the broadest
possible range of possible solutions, and provide con-
clusions and recommendations thereon, such as, but
not limited to, (A) changes in the existing 7(a) and
504 programs such as additional user fees, dollar
loan limitations per borrower, dollar loan limitations
per participating lender, limitations on the use of
loan proceeds, and changes in borrower qualification,
(B) establishment of new programs such as a
government-sponsored enterprise; and
(5) the commission should provide a written re-
port within thirty days evaluating short term solu-
tions and within six months evaluating longer range
solutions.
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