Senate Committee Approves Levin Provision to Provide Loans to Expanding Small Businesses

WASHINGTON – The Senate Small Business Committee this week approved a provision authored by Sen. Carl Levin, D-Mich., which establishes a Small Business Intermediary Lending Pilot Program to address the needs of expanding small businesses. The amendment was included in a bill reauthorizing funding for the Small Business Administration (SBA).

"This pilot lending program is aimed at businesses that need loans larger than those available under the SBA Microloan Program but for a variety of reasons – including lack of sufficient or conventional collateral – are unable to secure the credit they need at the terms they need through conventional lenders," Levin said. "By helping start-up and expanding small businesses, we will help to create jobs, including jobs for low-income individuals. We will help to stimulate the economy by facilitating new lending and investing in businesses."

The pilot lending program is designed to work through local non-profit lending intermediaries. This proposal authorizes the SBA to make one percent, 20-year loans on a competitive basis to up to 20 non-profit lending intermediaries around the country. These loans would be used to capitalize a revolving loan fund through which the intermediary would make loans of between $35,000 and $200,000 to small businesses.

Many states, including Michigan, are fortunate to have a healthy network of community based, non-profit intermediary lenders that are experienced and successful in meeting the needs of these businesses. This pilot program will give them additional tools to help them create badly needed jobs among small businesses.

The bill also included a provision, authored by Levin, which enables small businesses hurt by low water levels on the Great Lakes to be eligible for disaster relief loans from the SBA.