504 Modernization and Small Manufacturer Enhancement Act of 2021

Floor Speech

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Ms. DAVIDS of Kansas. Madam Speaker, I move to suspend the rules and pass the bill (H.R. 1490) to amend the Small Business Investment Act of 1958 to improve the loan guaranty program, enhance the ability of small manufacturers to access affordable capital, and for other purposes.

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Ms. DAVIDS of Kansas. Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, I rise in support of the bill before us today, H.R. 1490, the 504 Modernization and Small Manufacturer Enhancement Act of 2021.

504 loans are an important SBA capital access product, allowing small businesses to affordably purchase machinery and equipment, acquire real estate, or take on other fixed asset costs.

The loan has a three-party structure where an SBA-backed 504 lender provides 40 percent of the financing, a third-party lender provides 50 percent of the financing, and a small business borrower provides 10 percent. This unique structure has helped thousands of entrepreneurs expand their businesses and hire more employees, especially businesses with significant fixed costs.

Last Congress, the Committee on Small Business's Subcommittee on Oversight, Investigations, and Regulations held a hearing to review the current status of the 504 loan program. We heard from a panel of 504 lenders who reported concerns with the loan closing process, specifically that closing delays have caused loans to fall through and businesses to lose out on affordable financing.

To that end, Ms. Craig put forth a strong proposal to streamline the 504 loan closing process and make compliance easier for CDCs, borrowers, and third-party lenders, who are essential to the 504 loan structure.

Two of the provisions of that bill, which passed unanimously through our committee and the House, were also included in the Economic Aid Act that was enacted in December.

The version of the bill before us today is identical to the version we passed last Congress, but for those provisions included in the Economic Aid Act.

The changes under consideration today continue to address the issues we have heard in our engagement with 504 lenders and their borrowers in our districts, and I am pleased we are taking a vote on them today.

These include increasing the maximum loan size for small manufacturers from $5.5 million to $6.5 million and easing the job retention or creation requirement for them, which helps make 504 loans easier to access.

We should be doing everything that we can to make navigating and utilizing this program as simple as possible. As a member of the Small Business Committee, I am committed to helping our small businesses and manufacturers weather this current crisis and to helping Main Street come back even stronger.

It is why I fought to secure $10 billion for the Defense Production Act in the American Rescue Plan Act to ramp up domestic production of PPE and other critical supplies. It is also why I introduced the SUPPLIES Act, which would promote the manufacturing of PPE and medical supplies by small businesses here in the U.S. I am proud to be a cosponsor of the bill to help small businesses and manufacturers so they can help us.

I want to thank the gentlewoman from Minnesota and the gentlewoman from California for their hard work, and I applaud their efforts to make bipartisan improvements to this valuable program.

I recommend a "yes'' vote to all my colleagues in the House.

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Ms. DAVIDS of Kansas. Madam Speaker, I yield such time as she may consume to the gentlewoman from Minnesota (Ms. Craig).

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Ms. DAVIDS of Kansas. Madam Speaker, I reserve the balance of my time.

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Ms. DAVIDS of Kansas. Madam Speaker, I continue to reserve the balance of my time.

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Ms. DAVIDS of Kansas. Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, the SBA's 504 loan program has made a significant impact on our Main Streets in its 62-year history.

In addition to partnering with banks to extend affordable fixed-asset capital, most CDCs in the program are also actively involved in promoting local economic development, especially for underserved business communities.

I am proud of the opportunity we have today to continue supporting the work of CDCs. I want to applaud the work by the gentlewoman from Minnesota, the gentlewoman from California, and their bipartisan effort on the 504 program.

I encourage all of my colleagues to vote "yes.''

Madam Speaker, I yield back the balance of my time.

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