A House Small Business subcommittee approved a package of reforms Thursday that would expand government-backed lending to small businesses and seek to streamline the government's role.
The finance and tax subcommittee approved eight bills by voice vote, including the Small Business Credit Expansion and Loan Markets Stabilization Act of 2009. The legislation would extend for an extra year provisions in the stimulus package, including the America's Recovery Capital loan program and the 90% government guarantee for Small Business Administration loans. It would also increase the eligible size of Arc loans to $50,000, from $35,000, and shorten the application Arc borrowers would have to complete.
Another provision would require the SBA to more promptly respond to lenders' claims on the guaranteed portions of defaulted loans. Under the provision, if a claim is not addressed within 45 days, it is automatically deemed to be approved and must be paid. The bill would also create a training program for SBA lenders.
