The House passed bipartisan legislation designed to streamline SBA lending programs and make capital more readily available to small firms.

The Small Business Lending Improvements Act, H.R. 1332, expands financing options for start-ups in rural areas and emphasizes outreach to healthcare providers in order to address increasing demand to medical providers in rural and low-income areas.

The bill also establishes a program to help more veterans returning from Iraq and Afghanistan start businesses by reducing borrower and lender fees and increasing loan guarantees.  

“Access to capital is vital to the success of small firms in every region, industry, and sector,” Small Business Committee Chair Nydia Velázquez said. 

The House passed legislation overhauling SBA’s disaster loan program, which was widely criticized after Hurricane Katrina.

The bill would increase the maximum disaster loan from $1.5 million to $3 million and allow SBA-approved banks to make disaster loans.

The Bush administration opposed a provision authorizing grants of up to $100,000 for Gulf Coast small businesses that were rejected for disaster loans. The ranking Republican on the Small Business Committee, Ohio Rep. Steve Chabot, said the grants would only prop up companies “whose survivability was highly improbable in the first place.”

But Small Business Committee Chair Nydia Velazquez of New York said grants are needed to spur redevelopment of communities devastated by Katrina.

The House passed the bill on April 18 by a 267-158 vote. Similar legislation is pending in the Senate.

Small businesses generate half of the private, nonfarm gross domestic product, according to a study released by SBA’s Office of Advocacy. The study, covering the years 1998-2004, found that small firms’ contribution to GDP held steady during the period.

However, there has been a long-term decline from the late 1950s when the small business share of GDP was approximately 58 percent.

The study was written by Katherine Kobe of Economic Consulting Services and funded by the Office of Advocacy.