House Votes SBA Loan Subsidies The House voted to reduce fees on SBA’s flagship 7(a) loan program by restoring a federal subsidy. The House added $40 million to SBA’s 2007 appropriation to cover the cost. Two years ago the Bush administration persuaded Congress to eliminate the appropriation for the loan program and put it on a self-sustaining basis, funded by fees from borrowers and lenders. The sponsor of the House amendment, Rep. Nydia Velazquez (D-NY), said the result has been fee increases of $1,500 to $3,000 on small and mid-size loans. She said the higher fees have led to fewer and smaller loans during the current fiscal year. “The truth is that the program is simply too costly for this nation’s small businesses,” she said during the House debate June 28. But House Small Business Committee Chairman Donald Manzullo (R-IL) said the increased fees amount to only $10 a month over the life of a $150,000 loan. Manzullo supported continuing the subsidy in the past, but said he has changed his mind because of the small cost to borrowers and the continued popularity of SBA-guaranteed loans, even with the higher fees. “The 7(a) program at the Small Business Administration has operated on full cylinders, breaking record after record of program usage throughout all demographic and regional groups,” he said. Velazquez said her amendment had the support of 20 small business organizations. It passed on a 214-207 vote. The Senate has not yet voted on the SBA appropriation. Last year it refused to go along with the House in restoring the loan subsidy. The House also voted to restore funding for SBA’s MicroLoan program, which makes small loans to low-income business owners. The Bush administration has been trying to kill the program for several years, but Congress has saved it.