Representative Newman Introduces Legislation to Expand Loan Program for Small Businesses

Press Release

Today, U.S. Representative Marie Newman (D-IL-03) introduced legislation that is designed to expand federal loans to small businesses across the nation to further promote business growth and job creation as the economy recovers from the COVID-19 pandemic. The 504 Program Level Flexibility Act would expand the Small Business Administration's (SBA) 504/CDC Loan Program by increasing its lending authority by 15% this fiscal year and once for every other fiscal year with adequate notice to Congress. Currently, the loan program is at-risk of exceeding its lending authority and effectively shutting down for the remainder of the year, leaving tens of thousands of small businesses without access to loans they need to survive.

"As a former small business owner, I know that access to long-term federal loans can mean the difference between an open business and closing your doors forever," said Congresswoman Newman. "With the SBA's loan program at-risk of shutting down for the rest of this year, Congress has a fundamental obligation to intervene so we can ensure our small businesses are receiving the long-term relief and assistance they need to fully recover from this pandemic. By passing this legislation, we can not only further support our local entrepreneurs but also lift up local labor, create more good-paying jobs and build back a stronger, more equitable economy."

Due to the pandemic, the SBA's 504 Loan Program, which provides long-term, fixed rate financing of up to $5 million, is at risk of exceeding its lending authority before the end of the fiscal year - a historic trend. If the program were to exceed its lending authority, it would close for the remainder of 2021, putting tens of thousands of small businesses at further risk of closing their doors for good. By increasing the program level by 15% this fiscal year and the years that follow, countless mom-and-pop shops, family-owned stores, and other local community businesses could be saved thanks to the long-term financial stability of these loans.

The SBA's 504 Loan Program provides long-term, fixed rate financing of up to $5 million for major fixed assets that promote business growth and job creation. These loans are made available through Certified Development Companies (CDCs), SBA's community-based partners who regulate nonprofits and promote economic development within their communities. These CDCs are certified and regulated by the SBA.

Today's legislation builds on Congresswoman Newman's ongoing efforts to ensure small businesses are receiving the resources and relief they need to fully recover from this pandemic. Last month, she introduced the Relief and Equity for Small Businesses through Tax (REST) Act, which is designed to cut taxes on the smallest of small businesses across the country.

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