WASHINGTON - A rescue of the Small Business Administration loan program is likely to be presented to President Clinton by Oct. 1, after passage of a House bill Tuesday.
Like a package passed by the Senate earlier, the House proposal imposes higher fees on SBA lenders and borrowers and reduces the amount of federal loan guarantees. Congressional staffers said they expect few difficulties in reconciling the two versions; lawmakers are expected to meet within 10 days to craft the final bill.
The House version calls for federal guarantees to cover 80% of loans up to $100,000 and 75% of larger loans. Currently, the government guarantees 90% of loans up to $150,000 and 85% of greater loans.
The bill also would create a sliding fee schedule that would levy a 2% charge on loans up to $250,000. The rate would increase to 3% for loans exceeding $500,000. The House version would save $255 million over two years.
The Senate bill is structured similarly, but uses slightly different formulas to determine fees. For instance, the Senate version calls for fees to be levied on only the guaranteed portion of the loan, rather than the gross amount. Also, the Senate version begins to raise the fee from 2% after the guaranteed portion reaches $80,000.
Finally, the House version is intended to reduce the federal government's subsidy of the loan program from $2.74 per $100 in total loans made to $1.06, whereas the Senate would reduce the subsidy to $1.29. But the Senate version also includes a provision to add a surtax to keep the subsidy rate on target.
Though bankers are not happy with the increased SBA fees, lobbyists for the industry say there is little choice but to accept the charges rather than see the program dismantled.
"Given the budgetary prospects today, we are supportive of efforts to keep things funded," said Josh Tenuta, senior federal legislative representative for the American Bankers Association. "We have an extremely successful SBA lending program, and bankers think this (legislation) is positive when you consider the rumblings we heard earlier this year about doing away with the program."