Press Releases

Small Business Committee Monitors Progress of SBA Microloan Program Reforms

f t # e
Washington, March 7, 2019 | comments

Small Business Committee Monitors Progress of SBA Microloan Program Reforms

WASHINGTON – Today, the House Committee on Small Business Subcommittee on Economic Growth, Tax, and Capital Access met for a hearing titled, “Small but Mighty: A Review of the SBA Microloan Program.”  Ranking Member Kevin Hern (R-OK) delivered the following opening statement:

Remarks as Prepared for Delivery

 

Thank you, Mr. Chairman. 

Although the country continues to record above average economic marks, the nation’s smallest firms still face challenges when it comes to financing their businesses. This is even more pronounced for the category of small businesses known as micro businesses.

Recognizing the difficulties the nation’s smallest firms face, Congress sought to alleviate the capital access issue with the creation of the Small Business Administration’s Microloan Program in 1991.

After a brief trial period, Congress made the program permanent in 1997, and the Microloan Program has been assisting entrepreneurs ever since.

Unique to the program is the financial transaction that includes SBA making a direct loan to a Microloan intermediary or non-profit that is working within the program.  From there, the intermediary provides loans directly to small businesses in need.

Importantly, these small businesses are not left by themselves to fight for survival. Built into the program is the requirement of technical assistance or counseling by the intermediary. This program is what we are going to be discussing today.

Last year, Members of this Committee were able to enact a number of reforms to the Microloan Program. Included in the legislation were two important studies. First, SBA is required to study the utilization levels of the program by micro lenders. Second, the Government Accountability Office is required to examine SBA’s Microloan oversight capabilities.

With any government program, is it critical to have comprehensive oversight to safeguard American taxpayer dollars.

As we eagerly await both reports which are due to Congress this August, I look forward to today’s hearing that will review the program from the perspective of participants directly involved on the ground.

SBA’s capital access programs are transforming neighborhoods and communities from my home state of Oklahoma to Florida and beyond. Following in last year’s footsteps, we must continue to create an environment where small businesses are able to grow, expand and create jobs.  

As the hearing title implies, these companies may be small, but they have an outsized effect on our economy.

Thank you, Mr. Chairman, and I yield back.

 

f t # e