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EDSR INFORMATION 08-11-2003 Washington Bureau- bizjournals.com - Page 1 of 3 k pat * * ' :,, "'' 1 s' 1.' * 4` *- - • .0-*"*" rn .. tzio ais Subscribe Book of Lists Sales Prospecting Money HR Help Email Alerts Biz Resources Sales Leads Classifieds Latest News Pr Search Type keywordso; »Archives»Search Watch a News by Industry N Home»Washington Bureau»Archive»2003»August»Week of August 4,2003 Sign u August 4,2003 SBA bills boost loans to manufacturers ' LO Kent Hoover DECI Washington Bureau Chief MAI On the morning of July 24,the Congressional Manufacturing Caucus met for the first time, 7 gathering in the House Small Business Committee's hearing room at the invitation of committee Chairman Don Manzullo, R-Ill. Industry Update Click here to browse industry categories The focus on manufacturing did not end, however, when the pastries were taken out the news. door. As soon as the breakfast ended, Manzullo gaveled his committee into session and pushed through a Small Business Administration reauthorization bill that increases the Email Alerts amount of mone small manufacturers can borrow throw _ BA .ro' . s and cre. - s- Daily Business Upd programs specifically aimed at helping manufacturers. Search Watch News by Industry The legislation madegood on Manzullo's promise HR Blunders SBA loan approvals * g p Avoid spending big earlier this year to use the SBA reauthorization bucks to correct Type of Number of Total bill as a way to boost the nation's struggling HR blunders. IIIloan loans dollars manufacturing sector. Money Center Open books bring All loans 52,435 $10.03 3 "We are hemorrhaging manufacturing jobs in thisbillioCompanies that ke country," says Manzullo, whose hometown of open to employees 7(a)loans 47,675 $7.85 billion Rockford, Ill., once boasted of being the machine acting more like pa tool capital of the world but is losing ground to 504 loans 4,760 $2.18 billion overseas competition. Preferred *Year to date through June 30 Partner "The small business economy, and the entire Increase Source: Small Business Administration cannot succeed without a sound Productivity,out manufacturing base,"he says. Solutions Arrange a free exe with an Administa The bill allows small manufacturers to obtain SBA-guaranteed loans of up to $4 million learn more about y through the 504 program, which pairs certified development companies with banks to costs,the impact o finance projects that generate jobs in a community. The previous loan limit for the SBA- revenue,and how backed part of a 504 financing package was $1 million to $1.3 million, depending on the help increase the p type of project. business. Arrang The increased 504 loan maximum for manufacturers also was included in the Senate's version of the SBA reauthorization bill. HR Help Center At work "There is no doubt we will put more money into small manufacturing with this bill," says Boost your job inte Christopher Crawford, executive director of the National Association of Development P with a mini-intervi Companies, the trade group for CDCs. `,. In order to stay competitive in global markets, U.S. manufacturers need to invest in •s� "sophisticated, leading-edge technology and equipment,"he says. Allowing small http://twincities.bizjournals.com/extraedge/washingtonbureau/archive/2003/08/04/bureau l.h... 8/4/2003 Washington Bureau- bizjournals.com Page 2 of 3 manufacturers to obtain larger loans through the 504 program will help address their need for capital, he says. • The legislation also increases 504 loan size limits for other types of small businesses. The House version doubles the regular SBA-backed loan maximum to$2 million, and increases the amount of money available for projects that fulfill a public policy purpose-- such as expanding minority business development--to $2.5 million.The Senate version increases these limits to $1.5 million and$2 million, respectively. The Senate bill also opens the 504 program to nonprofit child care centers, at the request of Sen. John Kerry, D-Mass. "This provision is intended to address a special need for child care, and it is not my intention to expand the program to other types of nonprofit organizations in the future," says Sen. Olympia Snowe, R Maine, chairman of the Senate Small Business and Entrepreneurship Committee. Both the House and Senate bills increase authorization levels for the SBA's 7(a) general business loans to $16 billion in fiscal 2004 and$16.5 billion in fiscal 2005. The amount that actually will be loaned through the 7(a)program depends, however, on demand from small businesses and how much money Congress appropriates to subsidize the government-guaranteed loans. Under the SBA budget approved by the House July 23, an estimated$9.3 billion would be available for 7(a) loans next fiscal year. About$7.85 billion in 7(a) loans were made during the first nine months of this fiscal year, • a 3 percent decline from the same period a year earlier. But the number of loans increased 37 percent as the average size of each loan fell from $232,075 to $164,600. Hubzones vs. minority firms Both the House and Senate bills also include numerous provisions aimed at giving small businesses a better shot at winning government contracts. The bills require the SBA to hire more procurement center representatives to identify contracting opportunities and make sure large government contractors follow through on their commitments to hire small businesses as subcontractors. They also direct the agency to implement a long-stalled program that would give women- owned businesses preferential treatment for government contracts in industries where women have been underrepresented. The House and Senate bills differ significantly, however, in their treatment of the Hubzone program, a contracting preference for small businesses that are located in low-income areas. The Senate bill expands the Hubzone program to include closed military bases, while the House bill includes two provisions that would "devastate"the program, says Ronald Newlan, chairman of the Hubzone Contractors National Council and co-founder of Global Solutions Network, a Hubzone-certified firm in Alexandria, Va. Under the House bill, minority-owned businesses in the 8(a)program would get priority for federal contracts over Hubzone firms. The House committee's ranking Democrat,Rep. • Nydia Velazquez of New York, says this language simply codifies current regulations. But the SBA told contracting officers in 2001 to give equal treatment to the two programs. http://twincities.bizj ournals.com/extraedge/washingtonbureau/archive/2003/08/04/bureau l.h... 8/4/2003 Washington Bureau- bizjournals.com Page 3 of 3 Newlan believes the House committee "consciously decided"to favor minority-owned businesses over Hubzone businesses. • The House bill also requires that the owner of a Hubzone firm be "economically disadvantaged." Current law does not address a Hubzone firm owner's race or personal income. Newlan says the change would result in decertification of about 5,000 of the 8,000 firms that have signed up for the Hubzone program. "That's trouble,"Newlan says. "It would limit who can do good for the community." Newlan is lobbying senators to make sure the final version of the SBA reauthorization bill does not include the House's changes to the Hubzone program. SBDCs won't have to recompete Finally, both the House and Senate bills are notable for what they do not include: A request by the SBA to make Small Business Development Centers recompete for grants every five years. Critics said this proposal would hinder the ability of the SBDCs to provide entrepreneurial counseling and training to the 650,000 people they serve every year. "We're very thankful that didn't make it in," says Giovanni Coratolo, director of small business policy for the U.S. Chamber of Commerce. disk r"Permits 1OCAE SERVICES - ate . o b k SM1e. / Home I Subscribe I Book of Lists I Reprints I Email Alerts I Sales Leads I Classifieds I Latest News I Print Editions I S Sales Prospecting Money Center I Business Resources I HR Help Center Community I Search I Office Supplies bizjournals I Contact Us Use of,or registration on,this site constitutes acceptance of ourUser Agreement Please read our Privacy Policy ©2003 American City Business Journals,Inc.All rights reserved.Contact us atinfo@bizjournals.com. The material on this site may not be reproduced,distributed,transmitted,cached or otherwise used,except with the prior written permiss • http://twincities.bizj ournals.com/extraedge/washingtonbureau/archive/2003/08/04/bureau l.h... 8/4/2003