Landrieu Secures Small Business International Trade Reforms
The Senate Small Business Committee yesterday unanimously approved S. 1256, the Small Business Lending Reauthorization and Improvements Act that included a key provision for exporters added by United States Senator Mary L. Landrieu, D-La., a committee member. The provision would make the Small Business Administration (SBA) International Trade Loan (ITL) program more user-friendly, reduce paperwork and minimize bureaucracy for lenders and borrowers.
"Small businesses are important players in international trade," Sen. Landrieu said. "Given the importance of these exporters to my state and to the rest of the country, this bill will improve their competitive edge in the international market and give them necessary resources for success.
"These commonsense improvements to the loan program will help reduce bureaucracy and paperwork for Louisiana's more than 2,000 exporters."
SBA ITLs help exporters develop and expand overseas markets, upgrade equipment and facilities, and assist exporters adversely affected by competition. Exporters can currently borrow up to $2 million with $1.75 million guaranteed by SBA. But the loans are not user-friendly and, as a result, are underutilized.
For example, the $250,000 difference between the loan cap and the guarantee requires borrowers to take out a second SBA loan for a $2 million guarantee. The loans can only be used to acquire fixed assets and not working capital, a common need for exporters. Furthermore, ITLs do not have the same collateral or refinancing requirements as SBA 7(a) loans.
Sen. Landrieu's provision makes the SBA International Trade Loan program more user-friendly by raising the loan cap to $3.67 million and the guarantee amount to $2.75 million while also bringing collateral and refinancing requirements in line with the regular SBA 7(a) lending program. It also allows the loans to be used for working capitol. This provision was also introduced as part S. 738, the "Small Business International Trade Enhancements Act," a larger SBA international trade bill that Sen. Landrieu introduced earlier this year.
Also included in the bill is a provision supported by Sen. Landrieu which would create a three-year SBA pilot program providing 504 loans for fixed assets to non-profit childcare centers. The provision would help Louisiana child care centers, particularly those in areas where childcare shortages resulting from Hurricanes Katrina and Rita are beginning to seriously impact businesses and workers.
The bill was sponsored by Small Business Committee Chairman John Kerry, D-Mass., and was cosponsored by Sens. Landrieu, Olympia Snowe, R-Maine, the committee's ranking member, Barack Obama, D-Ill., John Tester, D-Mt., and Carl Levin, D-Mich.
It is now headed for consideration by the full Senate. Last month, the House passed its version of the bill, H.R. 332, the "Small Business Lending Improvements Act."