Bill to ease small-busi­ness loans ad­vances

Los Angeles Times - - Daily Market Roundup - Sharon Bern­stein sharon.bern­stein@ latimes.com

A small-busi­ness loan res­cue pack­age that’s been stuck in Congress for months is headed for fi­nal ap­proval Thurs­day in the House.

The House Rules Com­mit­tee on Wed­nes­day cleared the way for de­bate on the bill and a vote to rat­ify the pack­age passed by the Se­nate last week. The bill would then go to Pres­i­dent Obama, who has said he will sign it.

The leg­is­la­tion would pro­vide funds for the govern­ment to waive oner­ous fees on loans backed by the Small Busi­ness Ad­min­is­tra­tion. It would also make lend­ing to small busi­nesses less risky to banks by al­low­ing the SBA to guar­an­tee up to 90% of a loan’s value.

The bill would set up a $30-bil­lion fund to en­cour­age com­mu­nity banks to in­crease lend­ing to small busi­nesses. In ad­di­tion, banks could make larger loans than pre­vi­ously al­lowed.

The loan mea­sures are par­tic­u­larly im­por­tant to South­ern Cal­i­for­nia, where small busi­nesses pro­vide more than half the jobs.

Most of the bill’s pro­vi­sions were added to the SBA’s arse­nal for mak­ing loans in 2009 as part of the eco­nomic stim­u­lus pack­age. But money for the pro­gram ran out in May, and leg­is­la­tion to restart it has been stalled all sum­mer amid par­ti­san wran­gling. Thou­sands of busi­nesses — many of them ap­proved for loans last spring — have been wait­ing for a res­o­lu­tion.

“Bor­row­ers waited and banks waited and we’ve been wait­ing for 90 days now,” said Jim Wullschleger, se­nior vice pres­i­dent of City Na­tional Bank in Los An­ge­les. “It has slowed down lend­ing ac­tiv­ity to small busi­nesses a pretty dra­matic amount.”

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