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Mr. KERRY. Mr. President, once again, too many of our Nation's small businesses are facing difficulty in gaining access to capital. That is why today I am introducing the Increasing Small Business Lending Act to increase access to capital for our Nation's small businesses to help them sustain and build their businesses, create jobs and expand our economy.
In October 2008, markets froze. Credit lines were cut. A lending gap was created in the market. Even Small Business Administration guaranteed loans, that help reduce risk for lenders, were stalled. Congress stepped up and enacted temporary measures to help fill the gaps in small business lending, saving nearly 90,000 small businesses.
One such business is LazerCraze in North Andover, Massachusetts that received an SBA loan to expand to a second location and purchase state-of-the-art equipment that allowed them to hire an additional 37 full time employees.
SBA, administrator Karen Mills has said that the previous temporary changes to the SBA loan programs were a success, ``In short, it worked. We engineered a turnaround in SBA lending even though conventional credit was, and still is to some extent, very tight. Taxpayers got a big bang for the buck. With just over a billion dollars in total subsidy, we supported about $42 billion in lending. In fact, SBA had its highest-ever weekly loan volume the week before Christmas when we supported nearly 2 billion dollars in lending, 10 billion total last quarter. Here is the headline: overall, that is nearly 90,000 small businesses that are not surviving this recession, but growing and creating jobs.
Unfortunately, the temporary small business loan provisions ran out of funding in January 2011, ahead of the authorization which expired in March 2011. Since then, small business lending has declined, making it more difficult for small businesses to create jobs and for our economy to emerge from our economic downturn.
The legislation I am introducing today is similar to the Small Business Lending Market Stabilization Act, which I introduced in 2008 that was included in both the American Recovery and Reinvestment Act of 2009, P.L. 111-5, and extended in the Small Business jobs Act, P.L. 111-240. The Increasing Small Business Lending, Act will eliminate for one year the fees for 7(a) and 504 Small Business Administration loans and increase SBA loan guarantee of 90 percent, policies that were started as part of the American Recovery and Reinvestment Act and extended in the Small Business Jobs Act.
According to the SBA, total small business loans outstanding, loans under $1 million, actually declined during the first half of 2011 after the temporary provisions ended. Loans outstanding to small businesses at the end of the second quarter totaled only $607 billion, which is the slowest since the economic downturn began in 2008.
We can't afford to have our economic progress reversed by a decline in access to capital for small businesses. Since the increased guarantee and reduced fees have expired, our economic recovery could be impeded if we don't act to continue the policies that we know work. By extending key provisions to bolster access to capital, small businesses will have the assurance and support they need to put their innovative ideas into practice and get more Americans back to work.
My legislation will complement the existing Small Business Lending Fund that encourages lending to small businesses through smaller community banks. Small businesses are the backbone of our economy and I ask all Senators to support job growth and small businesses by supporting this legislation.
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