Langevin Seeks to Restore Slashed Funding For RI Small Businesses

Feb 14, 2002
(Washington, D.C.)–Congressman Jim Langevin, a member of the House Small Business Committee, yesterday called for increased funding for small business assistance programs.  During a Small Business Committee hearing on the Administration's proposed FY 2003 budget for the Small Business Administration, Langevin reiterated his strong support for additional loan guarantee funding for Rhode Island small businesses.  He said the Administration's proposed budget lacks sufficient funding to serve entrepreneurs seeking assistance from the Rhode Island Small Business Administration (SBA) office to launch new business ventures.

Under the proposed budget, Rhode Island would only be able to process 50 percent of its 7(a) loan volume from the previous and current year, decreasing loan assistance for the state by $50 million.  This would seriously affect the ability of small businesses to start and grow in Rhode Island with local SBA assistance, and hamper recovery in the current economic climate. 

“The Administration continues to overestimate the credit subsidy cost of the 7(a) loan program, forcing both borrowers and lenders to pay unnecessarily high fees,” explained Congressman Langevin in his statement.  “If these estimates were revised, the SBA could lower its fees and lenders could attract more business.”

 In 2001, the 7(a) loan program backed 43,000 loans worth over $9.9 billion to small firms nationwide.  Last year, 27 different financial institutions in Rhode Island approved 961 7(a) loans for a total of over $94 million to Rhode Island's small business community.  These 7(a) loans comprise nearly one-third of all long-term loans made to U.S. small businesses, and the program is critical to the start-up success of small businesses across America

Langevin further stated: 

“Mr. Chairman, small businesses are the backbone of Rhode Island’s economy and account for more than 98 percent of the jobs in the state.  They bring new and innovative services and products to the marketplace and provide business ownership opportunities to diverse and traditionally underrepresented groups.  Many of these small businesses rely on the valuable loan assistance, technical training and grant programs offered by the SBA….I would strongly urge the Administration to submit a proposal that sufficiently addresses the needs of the small business community…”