One line item in the budget that President George W. Bush is presenting to Congress should sound an alarm within the business community.
President Bush’s most recent budget proposal would effectively reduce the U.S. Small Business Administration’s 7(a) loan-guarantee program by about 50 percent. This at a time when it is becoming increasingly difficult for a small business to obtain long-term financing.
The situation, according to the National Association of Government Guaranteed Lenders, "could leave an already weak small business sector crippled…"
Seifert Systems Invests in Energy Efficiency to Strengthen Operations
For manufacturers, energy is more than just another operating expense. It plays a critical role…
Learn More
Rhode Island it would seem could be in an especially precarious situation should the 7(a) loan program be reduced. We are, after all, a state of small businesses. Many of those small businesses rely on SBA loans to grow. Last year, for example, the SBA guaranteed $94 million in loans to 961 Rhode Island businesses.
Under a worst case scenario, it is conceivable that as much as $50 million could be pulled out of the state’s lending pool. That could leave small business owners few options.
Watering down the 7(a) program, according to Bank Rhode Island Executive Vice President Don McQueen, could have a "sweeping effect" on access to capital for all small businesses.
To date, our congressional delegation is saying the right things. We spoke to representatives from U.S. Sen. Jack Reed’s office and U.S. Rep. Patrick Kennedy’s office. They say they are deeply concerned about the cuts and they recognize the importance of the loan program.
This issue will heat up next month as detailed federal budget discussions take place in various congressional subcommittees. That would be a good time for Rhode Island’s business community to remind our congressional delegation to be diligent in fighting to retain the 7(a) loan program at its present levels.
You can reach U.S. Sen. Jack Reed at 943-3100, U.S. Sen. Lincoln Chafee at 453-5294, Congressman Patrick Kennedy at 729-5600 and Congressman James Langevin at 732-9400.
