Jul 30 2015
Bill Provides Aspiring Entrepreneurs with Access to Affordable Loans
WASHINGTON – Yesterday, the Senate Committee on Small Business and Entrepreneurship passed U.S. Senator Deb Fischer’s (R-Neb.) bill, S. 1857 – The Microloan Modernization Act of 2015. The legislation would help America’s entrepreneurs with limited funding by creating more opportunities for them to start their own businesses. Senator Fischer released the following statement after the bill’s passage:
“This common-sense bill will provide more Americans with the tools they need to start their own businesses, escape poverty, and create jobs. More economic independence will lead to strong families; stronger families will help build stronger communities. The Small Business Committee’s approval of this legislation today means we are one step closer to bringing the American dream within reach for more of our nation’s families.”
The Microloan Act of 2015 helps America’s entrepreneurs with limited resources by increasing flexibility and creating more opportunities for them to start their own businesses. Access to capital is a major challenge for startups and small businesses, which are often denied loans by larger investors.
Established in 1992 as a Small Business Administration (SBA) pilot program, the microloan program has loaned over $55 million to nearly 4,000 small businesses across America. While the program has grown in size, scope, and success, many of the original provisions of the pilot program remain in effect today.
Fischer’s Microloan Modernization Act of 2015 includes the following changes to strengthen the program:
Raises the total limit on outstanding loans from by $5 million to $6 million. Current law limits the total amount of loans that an intermediary can make at $5 million dollars. Successful intermediaries then face a cap that prohibits them from making more loans to entrepreneurs. This section amends the Microloan Program by raising the total limit of outstanding loans from by $5 million to $6 million.
Provides funding opportunities for entrepreneurial outreach efforts. This section amends the Microloan Program by offering microloan intermediaries the opportunity to reallocate technical assistance funds from borrowers to other entrepreneurial outreach efforts under standards developed by the (SBA). Under no circumstances will the waiver harm the ability of microloan intermediaries to provide technical assistance to their borrowers.
Requires the GAO to conduct a study of low participation rates in the SBA program. Of the approximately 1,000 providers of microloans in the United States only about 187 participate in the SBA program. The report is designed to uncover the reasons for the low participation rate and uncover solutions for improving it.
Click here to view text of The Microloan Modernization Act.
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