September 14, 2020
WASHINGTON, D.C. – Today, Rep. Scott Peters (CA-52) released the following statement on the House passage of the Microloan Improvement Act of 2020 and the Microloan Transparency and Accountability Act of 2020, two bills that will reform rules for loans provided through the Small Business Administration’s (SBA) Microloan program:
“The ongoing pandemic has forced many small businesses to close their doors or operate at reduced capacity,” said Rep. Peters. “Today, Congress voted on a series of measures to increase access to capital, lower interest rates and expand grants through various SBA programs. These updates will help San Diego businesses get the money they need to stay afloat during this difficult time and will give entrepreneurs a lifeline to overcome the worst economic disaster since the Great Recession.”
Specifically, the two bills would enhance the resources available to nonprofit, community-based lenders through the SBA Microloan program, bolstering the intermediaries’ ability to provide direct loans to small businesses, as well as training and technical assistance to their current and potential borrowers.
The Microloan Improvement Act would increase the number of community-based lenders eligible for the lowest interest rate on loans from the SBA and allow these lenders to offer lines of credit to small businesses while extending the maximum repayment term for loans. This would help cut through bureaucratic red tape restricting lending to small businesses looking to grow and create jobs.
The Microloan Transparency and Accountability Act would boost microloans in rural areas and provide new reporting to Congress to ensure that the program serves America’s small business owners.
The Microloan Program in the SBA was created by Congress in 1991 to support and make funds available to community-based lenders, who in turn make loans to eligible borrowers. Many of these borrowers are underserved entrepreneurs who may not have a credit history or significant business experience.