Rep. Chu Raises Alarm About the Impending Shut Down of Critical Small Business Administration Loan Program

Today, Rep. Judy Chu (CA-27) spoke on the House floor to call attention to the looming shut down of the Small Business Administration’s (SBA) 7(a) loan program. The flagship program is designed to give small businesses access to capital through long-term loans in situations where capital cannot be found through conventional bank loans. Due to an increase in lending, SBA could reach the $18.75 billion legal lending limit for the 7(a) program as early as the end of July. Once this cap is reached, all 7(a) lending will be forced to come to a halt until the next fiscal year has begun.

Rep. Chu stated, “I’m here to ring the alarm bell on the pending expiration of a very important program next week. It is the Small Business Administration’s flagship 7(a) loan program, which provides long-term loans to small business that are unable to secure financing through traditional channels. About 80% of small-business owners who apply for a non-SBA loan get rejected. It is SBA’s 7(a) that gets them the money they need to succeed.

“In my district alone, more than $2 billion dollars in capital have been provided to small businesses since 1990. Not only does 7(a) lending directly support American jobs, it also operates at zero cost to taxpayers.

“We cannot let this successful program lapse. At the current rate of lending, this program could be forced to shut down as soon as next week. I urge the Speaker to act on this critical issue before August recess and make sure that our small businesses thrive.”

The full speech can also be found here.