Small Business Jobs and Credit Act of 2010

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Mr. SCHRADER. I yield myself 5 minutes.

Mr. Chairman, this amendment basically authorizes funding in the establishment of the Small Business Borrower Assistance Program to provide temporary assistance for a lot of the struggling small businesses out in America.

The Small Business Borrower Assistance Program will provide these small businesses which take out 7(a) loans under $300,000 with a reserve fund they can use at their discretion to help pay principal and interest payments if they should hit rough spots in their business cycles. Eligible small business borrowers will automatically be enrolled in the program unless they request otherwise, so it is very easy and unbureaucratic.

Once a borrower has been enrolled, the Small Business Administration will place an amount equal to 6 percent of the loan principal in reserve for the borrower. This means that a borrower who obtains a $300,000 loan will have $18,000 placed in reserve to help the borrower pay principal or interest payments. These funds can be applied to both of those at the borrower's discretion.

To be eligible for the program, a borrower must obtain the qualifying loan within 1 year after the SBA issues final regulations. This is a temporary bill to help us through the recession. The SBA must issue those final regulations within 180 days after the enactment of the program. That is to make sure that the program itself is available in the crunch times.

To prevent funds from being used for purposes other than for paying down the balances of small business loans, disbursements will be made directly to the lenders or to the loan servicers. Additionally, the Small Business Administration will have the authority to remove borrowers from the program who commit fraud or material misrepresentation.

Mr. Chairman, this is just another great tool in the toolbox for our small businesses in order to help them get back on their feet and to be the engines of economic growth.

I reserve the balance of my time.

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Mr. SCHRADER. I appreciate the concerns of the gentleman from Missouri. I do take issue with them, obviously.

Mr. Chairman, to prevent fraud and abuse--and unfortunately, that does happen in tough economic times--these payments are made to the lenders to make sure they go back to where they are supposed to be, as the taxpayers have authorized under this amendment and this bill. The 7(a) program is the most popular program out there. It is something banks are familiar with, and it is the small, struggling businesses that are likely to take loans out for under $300,000 that are most in need.

So this program is targeted, temporary, and timely. Small business lending in my State is half of what it was 2 years ago. We need every tool in the toolbox to encourage the lenders who have shown extreme reticence to lend to small businesses that this country is willing to back them up and to help these small businesses pay their loans if they need to during tough stretches and tough times.

I think if you're in favor of small business and of lending and if you want to make sure that they have access and that the program that we are establishing with $30 billion really goes to small business, you will want to vote ``yes,'' in favor of this amendment.

I urge a ``yes'' vote, and I yield back the balance of my time.

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