[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
REVIEW OF THE SBA'S 504/CDC LOAN PROGRAM
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HEARING
BEFORE THE
SUBCOMMITTEE ON INVESTIGATIONS, OVERSIGHT, AND REGULATIONS
OF THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
DECEMBER 10, 2019
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 116-065
Available via the GPO Website: www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
38-823 WASHINGTON : 2020
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HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELAZQUEZ, New York, Chairwoman
ABBY FINKENAUER, Iowa
JARED GOLDEN, Maine
ANDY KIM, New Jersey
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
JUDY CHU, California
MARC VEASEY, Texas
DWIGHT EVANS, Pennsylvania
BRAD SCHNEIDER, Illinois
ADRIANO ESPAILLAT, New York
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANGIE CRAIG, Minnesota
STEVE CHABOT, Ohio, Ranking Member
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
TROY BALDERSON, Ohio
KEVIN HERN, Oklahoma
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
TIM BURCHETT, Tennessee
ROSS SPANO, Florida
JOHN JOYCE, Pennsylvania
DAN BISHOP, North Carolina
Melissa Jung, Majority Staff Director
Justin Pelletier, Majority Deputy Staff Director
Kevin Fitzpatrick, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Judy Chu.................................................... 1
Hon. Ross Spano.................................................. 2
WITNESSES
Ms. Mary Mansfield, President and Chief Executive Officer, Bay
Colony Development Corporation, Waltham, MA.................... 5
Mr. Wayne Williams, Senior Vice President, Business Finance Group
Inc., Fairfax, VA.............................................. 6
Ms. Elaine Fairman, Executive Director, Business Expansion
Funding Corporation (BEFCor), Charlotte, NC.................... 8
Ms. Brooke Mirenda, President and Chief Executive Officer,
Sunshine State Economic Development Corporation, Clearwater, FL 9
APPENDIX
Prepared Statements:
Ms. Mary Mansfield, President and Chief Executive Officer,
Bay Colony Development Corporation, Waltham, MA............ 21
Mr. Wayne Williams, Senior Vice President, Business Finance
Group Inc., Fairfax, VA.................................... 29
Ms. Elaine Fairman, Executive Director, Business Expansion
Funding Corporation (BEFCor), Charlotte, NC................ 42
Ms. Brooke Mirenda, President and Chief Executive Officer,
Sunshine State Economic Development Corporation,
Clearwater, FL............................................. 51
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
Self-Help Ventures Funds..................................... 56
REVIEW OF THE SMALL BUSINESS ADMINISTRATION'S 504/CDC LOAN PROGRAM
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TUESDAY, DECEMBER 10, 2019
House of Representatives,
Committee on Small Business,
Subcommittee on Investigations, Oversight,
and Regulations,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:00 a.m., in
Room 2360, Rayburn House Office Building, Hon. Judy Chu
[chairwoman of the Subcommittee] presiding.
Present: Representatives Chu, Burchett, and Spano.
Also Present: Representative Chabot.
Chairwoman CHU. I shall call this Subcommittee to order,
and I thank everybody for joining us this morning. I especially
want to thank the witnesses who have traveled from across the
country to be here with us today.
On this Committee, we are focused on making sure that small
businesses, whether in my district of California or in Ranking
Member Spano's district in Florida and in every district across
the America, can access the capital that they need to start,
grow, and create new jobs. And we know that when capital is
affordable and accessible, small businesses can do what they do
best: strengthen our communities, create jobs, and fuel our
economy.
This is something I have witnessed firsthand in my home
State of California, where 4 million small businesses make up
99.8 percent of the businesses in our State and employ almost
half of our workers. California is the fifth-largest economy in
the world, and small businesses are the backbone of our
thriving economy.
But accessing capital is one of the biggest challenges
facing these small-business owners, and it can be even more
difficult if that capital is needed to purchase or improve
major fixed assets such as real estate, buildings, equipment,
and heavy machinery.
Recognizing the additional barriers to capital faced by
small businesses at this stage of growth, Congress enacted the
504 loan guarantee program to meet the long-term, fixed-rate
financing needs of small businesses who need an injection to
reach the next level.
The 504 program is a public-private partnership between the
Small Business Administration; nonprofit certified development
companies, also known as CDCs; and private-sector lenders,
typically banks and credit unions that offer a unique financing
structure for a small business. For most 504 loans, the
structure works as follows. The private-sector lender provides
50 percent of the cost of the project, the CDC provides 40
percent, and the small-business borrower provides 10 percent.
One of the primary purposes of the 504 loan program is job
creation, and, to participate in the program, small businesses
must meet certain job creation or retention requirements. If
the small business is unable to meet these requirements, it can
still qualify for the program if it meets one of several
community development or public policy goals outlined in the
Small Business Investment Act of 1958, such as expanding
minority- or woman-owned business development, reducing energy
consumption, or expanding exports.
The 504 program can be a powerful tool in helping small
businesses achieve relief from high-interest commercial loans.
Eligible businesses can refinance their loans through the 504
program and take advantage of lower interest rates, allowing
them to reinvest more capital into keeping their businesses
afloat.
I was proud to author the Commercial Real Estate and
Economic Development, or what we call the CREED Act, which was
enacted into law in 2015 and revitalized the ability for SBA to
offer refinancing for those who had loans. And this is after
this popular program had expired in 2012.
According to SBA, in 2018, the number of jobs supported by
504 was down slightly over previous years, which has raised
questions regarding the program's performance and whether we
need to modify and make improvements to the program.
As part of our congressional oversight of the program,
today we will hear from various CDCs across the country about
their views on the 504 program. The Committee would like to
know what is working, what is not, and what we can do to
improve the program.
I look forward to hearing from the witnesses today and
working with my colleagues on both sides of the aisle to
minimize the barriers facing our small-business owners when it
comes to securing affordable capital.
Again, I want to thank the witnesses for being here, and I
now yield to the Ranking Member, Mr. Spano, for his opening
statement.
Mr. SPANO. Thank you, Madam Chairwoman. And thank you for
holding this very important hearing today.
The Small Business Administration's 504/CDC loan program is
one of the most important and unique access-to-capital tools
available to small businesses. This public-private partnership
involves a financial institution, a small business, and the
CDC, also known as a certified development company. The program
is a key tool for long-term financing of real estate
transactions and small-business equipment purchases.
Going beyond just access to capital, economic development
is one of the real drivers of the program. With job creation
and job retention requirements, along with community
development and public policy requirements, this program is
transforming neighborhoods and communities from my home State
of Florida, to Tennessee, and to Ohio.
In fiscal year 2019, the SBA approved 5,933 loans, for a
total of $4.9 billion. From a job perspective, the program has
supported approximately 60,000 jobs over the last few years.
The program has many features, including a fairly new 25-
year debenture. CDCs also have the ability to utilize SBA's
Community Advantage Loan Program, which this Subcommittee held
a hearing on this past May.
From a cost perspective, the 504/CDC loan program runs on
fees built into the program. And because the fees have been
sufficient over the last few years, the program enjoys zero
subsidy from taxpayers, which is something I really like. I
hope this trend continues.
Today, we will be examining the program's performance as
well as its successes. We will also discuss how Congress can
address challenges and how we can look to improve and
strengthen the program, as Madam Chairwoman mentioned.
I am happy to have our witnesses joining us today. Thank
you for being here and taking the time out of your busy
schedules. I look forward to hearing your thoughts on many of
the 504/CDC loan program features.
As with any government loan program, comprehensive and
continuous oversight is required to ensure that the program
runs effectively and efficiently, all while safeguarding
taxpayer dollars.
Within my congressional district in Florida, which is just
outside of Tampa, we have 12,000 small businesses that employ
over 100,000 Floridians. And programs like the 504/CDC loan
program are instrumental to growing and expanding operations
and creating jobs all over the country, in California and in my
home State of Florida.
Again, I thank all the witnesses. Thank you for being here,
taking time away from your businesses and your families.
Madam Chairwoman, I yield back. Thank you.
Chairwoman CHU. Thank you, Mr. Spano.
The gentleman yields back.
And if Committee members have an opening statement, we
would ask that they be submitted for the record.
I would like to take a minute to explain the timing rules.
Each witness gets 5 minutes to testify, and members get 5
minutes for questioning.
There is a lighting system to assist you. The green light
comes on when you begin, and the yellow light means that there
is 1 minute remaining. The red light comes on when you are out
of time, and we ask that you stay within that timeframe to the
best of your ability.
I would now like to introduce our witnesses.
Our first witness is Ms. Mary Mansfield. Ms. Mansfield has
been with the Bay Colony Development Corporation since 1985 and
has served as president and CEO since 2016. Mary oversees day-
to-day operations of the 504 and microloan programs for Bay
Colony. Prior to that, she was closing manager and portfolio
manager.
In addition to her responsibilities at Bay Colony, she
served as Chair of the Board of the National Association of
Development Companies, or NADCO, where she taught the
introduction to 504 and the loan closing courses, both of which
are required for all CDC attorneys closing 504 loans.
Welcome, Ms. Mansfield.
Our second witness is Mr. Wayne Williams. Mr. Williams has
over 32 years of experience in commercial banking and small-
business lending, including extensive expertise in SBA's
programs.
His company, Business Finance Group, is a mission-driven
CDC providing financing solution to small businesses. BFG is
the number-one SBA 504 lender in the mid-Atlantic and a top CDC
nationally. As their senior lending officer, Wayne supports a
team of six business development officers who navigate SBA
policies and promote the company and its products to clients
and referral sources across its mid-Atlantic footprint.
Since 2015, he has served on the board of directors of
NADCO.
Welcome, Mr. Williams.
Our third witness today is Ms. Elaine Fairman. Ms. Fairman
began her SBA lending career at Catawba Regional Development
Corporation in 1987. In 2012, Ms. Fairman became the executive
director of Business Expansion Funding Corporation. With
offices in Charlotte and Raleigh, BEFCOR was a top producer in
North Carolina--and, in fact, still is--for 504 loans.
Her extensive expertise with the 504 program spans
marketing, underwriting, loan packaging, closing, servicing,
board relations, governance, compliance advocacy, and now
executive management. Is there anything she has not done?
In addition to her management of BEFCOR, Elaine is a board
member of NADCO. So we thank all the NADCO participation.
But welcome, Ms. Fairman.
And now I would like to yield to our Ranking Member, Mr.
Spano, to introduce our final witness.
Mr. SPANO. Thank you, Madam Chairwoman.
Our next witness is Brooke Mirenda. Ms. Mirenda is
president and chief executive officer of Sunshine State
Economic Development Corporation, which is also known as SEDCO.
SEDCO has multiple locations in my home State of Florida.
Ms. Mirenda has nearly 20 years of financial services
experience. In 2016, she joined SEDCO as senior vice president
and was quickly moved into the role of president and CDO.
You must have done something right there in that short,
brief period of time. Ms. Mirenda, we appreciate you taking the
time away from your business and from your community, from your
CDC, to talk with us today.
Thank you very much, Madam Chair. I yield back.
Chairwoman CHU. Thank you very much.
Ms. Mansfield, you are now recognized for 5 minutes.
STATEMENTS OF MARY MANSFIELD, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, BAY COLONY DEVELOPMENT CORPORATION, WALTHAM, MA; WAYNE
WILLIAMS, SENIOR VICE PRESIDENT, BUSINESS FINANCE GROUP, INC.,
FAIRFAX, VA; ELAINE FAIRMAN, EXECUTIVE DIRECTOR, BUSINESS
EXPANSION FUNDING CORPORATION, CHARLOTTE, NC; AND BROOKE
MIRENDA, PRESIDENT AND CHIEF EXECUTIVE OFFICER, SUNSHINE STATE
ECONOMIC DEVELOPMENT CORPORATION, CLEARWATER, FL
STATEMENT OF MARY MANSFIELD
Ms. MANSFIELD. Subcommittee Chairwoman Chu, Ranking Member
Spano, and other distinguished members of this Committee, thank
you so much for inviting me to testify here today.
Again, my name is Mary Mansfield. I am the president and
CEO of Bay Colony Development. We are a certified development
company in Waltham, Massachusetts, with offices in New
Hampshire, Vermont, and Rhode Island. I started with Bay Colony
back in 1985, and I was the company's third employee. I am
proud to say that we now employ 15 people at Bay Colony.
Bay Colony is a nonprofit, mission lender. We do SBA 504
loans, microloans, and we also provide grants to community
revolving loan funds. In 504 lending alone, we have helped over
1,500 borrowers that have created and retained over 13,000 jobs
in New England.
As you know, the 504 loan program is an economic
development tool that provides small businesses with long-term,
fixed-rate loans to help them acquire major fixed assets for
their expansion. These loans are most frequently used to
acquire land, buildings, machinery, and equipment. A 504 loan
can be either 10, 20, or now 25 years. The 504's long-term
fixed-rate gives a small business lower loan payment stability
without the concerns of rising interest rates or balloon
payments.
A distinguishing feature of the 504 program is jobs. By
law, each $75,000 in financing through the 504 loan program
must create or retain one job or meet one of several public
policy goals. Job creation and retention is the primary metric
of the 504 loan program.
Not only do we create jobs, the 504 loan program operates
at zero subsidy--no cost to the government. The fact that the
504 loan program requires no subsidy from the taxpayer is a
point of pride for our CDC community, and we work very hard to
ensure that our loan portfolio continues to operate that way
each year.
Some very famous, nationally known companies started off
with 504 loans when their businesses were just getting started:
Chobani yogurt, OtterBox, and Life is Good, to name a few.
We have helped many small businesses, but there are many
more that we could help with modifications to these loan
programs. I have listed several recommendations in my written
testimony, including changes to occupancy rules, disaster
assistance, and other areas. But let me mention one right now.
Currently, small businesses find the closing process
inconsistent, uncertain, and lengthy. I know this both from my
years of working with small businesses in New England and also
because for many years I was a CDC instructor for an industry-
wide course on 504 loan closings.
At least two areas in that process can be streamlined to
help small businesses. First, minor changes to a loan that do
not increase the risk to the SBA should not have to go through
a second round of SBA approvals. Rather, CDCs who have
demonstrated reliability and quality when working with
borrowers should be able to make these changes with their own
authority. I do mean minor changes here, such as typos in names
and addresses.
I think an example from one of my colleagues in the CDC
industry may best demonstrate how these minor reviews can delay
small businesses from receiving their funds. During the last
government shutdown, when SBA was not open to do these
approvals, one small business could not close on their loan
because it needed SBA approval to add periods to the ``LLC'' in
their company name.
Delays like this could result in our borrowers paying
higher interest rates, forfeiting their deposits on properties,
or completely losing the property if the sellers in these
transactions are not accommodating. Allowing a CDC to perform a
correction like this will help entrepreneurs move forward in
their businesses without any additional risk to the taxpayer.
Second, provide consistent and clear rules on what
documents need to be submitted to SBA for a loan closing and
when those documents need to be submitted. Right now, this can
vary depending on where the small business is located in the
country. This leads to unnecessary delays, frustration, and
this can impact the borrowers' interest rate.
I am happy to share more of our successes and suggestions
for further improvement. And, again, thank you for having me
today, and I look forward to your questions.
Chairwoman CHU. Thank you.
Mr. Williams, you are now recognized for 5 minutes.
STATEMENT OF WAYNE WILLIAMS
Mr. WILLIAMS. Thank you.
Chairwoman Chu, Ranking Member Spano, and other
distinguished members of the Committee, good morning, and thank
you for inviting me to testify.
My name is Wayne Williams, senior lending officer of
Business Finance Group, a nonprofit, mission-based certified
development company headquartered in Fairfax, Virginia, with
additional offices in Maryland, West Virginia, and Washington,
D.C.
As the Congresswoman mentioned, we are the number-one 504
lender in the mid-Atlantic and a top-20 CDC in the Nation out
of over 200. Since 1982, we have assisted over 3,000 small
businesses with $1.8 billion in 504 loans, supporting over $4.8
billion in total capital investment, resulting in over 41,000
jobs created and retained in the local communities that we
serve.
By statute, 504 loans stimulate local economic development
through job creation and retention. CDCs deliver that required
measurable economic impact at zero subsidy. That differentiates
us from other SBA and conventional loan programs. We are proud
of this accomplishment and determined to preserve it with
prudent underwriting and responsible portfolio management.
But CDCs do more than 504 lending. At Business Finance
Group, we participate in SBA's Community Advantage and ILP loan
programs. We view these as complementary to 504, allowing us to
provide clients with access to affordable, responsibly
underwritten capital along a continuum of credit, from start-up
to growth and expansion.
Other CDCs offer SBA microloans, USDA loans, State and
local loan programs, business incubators, and technical
counseling services. CDCs must invest excess capital generated
from 504 lending into other economic development.
As I stated, since 1982, Business Finance Group has
assisted many successful small businesses, but I would like to
highlight one for you today that was in my written testimony as
well.
Greater Unity Adult Services is based in Richmond,
Virginia, and is owned by Eugene Thomas, Jr. The company
provides training, treatment, and support for adults with
disabilities, including intellectual disabilities, mental
illness, and physical challenges. The company runs a day
support program facility and various assisted-living
residential care homes.
When we started working with Greater Unity in 2012, they
had 2 locations and 10 employees. Today, after 6 504 loans and
3 ILP loans, the company has 8 locations and 60 employees. They
have been a true 504 success story for us.
Many small businesses like Greater Unity have successfully
used 504 to fund growth and expansion, but even more could
benefit from the program with modifications and streamlining to
implement and adjust to changing market conditions, to increase
program access, and improve speed, transparency, and certainty.
I listed several recommendations in my written testimony,
including streamlining the closing process and improvements to
504 debt refi, but I will elaborate on my recommendation to
reduce the owner-occupancy requirements.
Occupancy requirements are a challenge that prevent or
limit the ability of small businesses to use the 504 loan
program, particularly in more densely populated urban
communities with multistory buildings and limited real estate
inventory.
Current statute requires a borrower that purchases an
existing building to occupy 51 percent or more of that
building. In urban areas of the country, it is common to have
multistory buildings where the small business may only need the
first-floor space. Owner-occupancy is 50 percent for an evenly
split two-story building and progressively drops with more than
two levels. In these cases, these properties are not eligible
for SBA assistance.
Relaxing the occupancy requirement across the board from 51
percent to 50 percent will increase small-business access to
504's attractive features.
Urban core markets, like Washington, D.C., and Baltimore in
my region, are home to thousands of small businesses that can
benefit from 504 if occupancy requirements are relaxed even
further for those specific targeted areas. Indicative of this
challenge, we have only approved 159 loans in Washington, D.C.,
in our 25 years of serving this particular market despite
thousands of small businesses that operate here.
These changes would better position 504 to reflect today's
business dynamics and real estate market.
Thank you for inviting me to testify, and I am happy to
answer any questions.
Chairwoman CHU. Thank you, Mr. Williams.
Ms. Fairman, you are now recognized for 5 minutes.
STATEMENT OF ELAINE FAIRMAN
Ms. FAIRMAN. Good morning. I am Elaine Fairman of Business
Expansion Funding Corporation, known as BEFCOR, in North
Carolina. BEFCOR is a Certified Development Company that
provides 504 loans and other small-business support throughout
North Carolina and portions of South Carolina. In addition to
the SBA 504 program, BEFCOR operates another program that
provides much smaller loans in rural and hurricane-impacted
areas.
Our 504 loans have created or retained 11,500 jobs through
the nearly 1,000 loans that have been made, totaling $519
million. These numbers have had a significant impact in our
economy.
One of our successful borrowers is a catering business that
began in 2010 and had offices and kitchens in multiple
locations. In 2014, a 504 loan approval enabled this business
to unite all operations under one roof, improving efficiency
and quality. As a result of the 504 loan, this business's
workforce tripled. Now the business is very successful, and its
owner was named North Carolina's Small-Business Person of the
Year in 2018. Without a 504 loan, that business would not have
been able to grow as quickly or as strongly.
In addition to the program's successes, I would like to
speak with you about strengthening the 504 program. There are
many topics that would improve 504 loans and access to capital
for small businesses. I would like to recommend several key
areas--EPC/OC rules, occupancy percentages, and refinancing,
among others in my written testimony. And I want to focus
especially on the often-avoided EPC/OC rules.
EPC/OC rules impact regular applicants who seek 504 loans
and form a separate corporation to own their own building. The
active business that creates products and services is known as
the OC. When the OC purchases a building, it forms a separate
legal entity to own its real estate. That entity is known as
the EPC. The EPC then leases its building to the OC, the
operating company.
While the two companies often appear to operate as one,
they are legally separate and distinct, and a written, formal
lease agreement outlines certain legal requirements between the
two entities. Reasons for having a separate EPC and OC are
varied, with the three most common being: reducing liability
risk to the OC, normal tax strategies, and normal business
strategies. All of these reasons are legal, sensible, and
responsible.
The EPC/OC structure is common in today's business
practices and environment; it was not common, however, when the
SBA rules were originally written.
When considering through a modern business lens the
outdated rules on EPC/OC that were developed decades ago, there
are many problems created: The rules are intrusive and
overbearing. The rules do not appear to protect the SBA from
losses or bad loans. The rules interfere with practical, basic
business and management financial decisions, and they dictate
the details of the relationship between the EPC and OC. The
rules exclude normal expenses from the lease that are generally
tax-deductible for other non-SBA business owners. The rules
potentially make the operating company more vulnerable to legal
action by removing protections desired by the owner when the
EPC is formed. And, finally, the rules adversely affect 504
borrowers who lease their unused space to another business.
CDCs often ask: If these rules do not protect the
government and do not help small businesses, why are the rules
still here? The time to repair this is now.
In addition to the EPC/OC rule issues, please consider
simplifying occupancy and refinancing rules. Both limit the
program's effectiveness, especially related to small-business
expansions.
I wholeheartedly believe that when we approach a challenge
with a common mission we have the opportunity to make
improvements. Some would say we have an obligation. I believe
we have both at this time.
Our four-person panel is committed to serving small
businesses, and, collectively, we represent over 90 years of
experience lending in the 504 program--90 years. So we
respectfully seek your guidance in helping resolve some of
these issues that impair the ability of small businesses to
grow.
Thank you for your time.
Chairwoman CHU. Thank you, Mr. Fairman.
Ms. Mirenda, you are now recognized for 5 minutes.
STATEMENT OF BROOKE MIRENDA
Ms. MIRENDA. Representative Chu, Ranking Member Spano, and
other distinguished Committee members, good morning. I am
Brooke Mirenda, and I am here on behalf of Sunshine State
Economic Development Corporation in Florida. I am pleased to
have the opportunity to discuss the economic development work
our CDC does and the jobs we help create, particularly with the
504 loan program, as well as discuss areas of opportunity.
Sunshine State Economic Development Corporation, also known
as SEDCO, was born from the result of a merger of two 30-year-
old CDCs in 2016. SEDCO is headquartered in beautiful
Clearwater, Florida, and is one of four CDCs that operate
within the State. We are considered a midsize CDC, and we have
seen significant growth over the last several years.
While the 504 loan program is our primary focus, we also
offer other loan programs to meet the demands of our small-
business borrowers, which include the SBA ILP and CA loan
programs. SEDCO also utilizes its own resources to offer
financing to small-business owners through a women/minority/
veteran loan program and SEDCO loan program. We believe that
our coordinated lending alternatives are essential in helping
small businesses grow and create jobs.
I joined the CDC in 2016 as senior vice president/business
development officer after 15 years in the financial services
industry, primarily in mid- and executive-level management. I
have had the privilege of working with small-business owners
around the State, helping them access funds they needed to
continue to grow their business and create more jobs.
In November of 2017, the board of directors appointed me as
the president and CEO. As SEDCO president, I continue to be
intimately involved in helping small businesses reach their
maximum potential.
The SBA 504 loan program not only creates jobs in our
economy, it also offers up competitive rates and terms for our
small-business owners, which helps preserves capital and grow
their businesses, while still operating at a zero subsidy.
I want to turn my attention to the work our CDC does with
the 504 loan program in particular. We work with lenders
throughout the State of Florida to offer a solution to small-
business owners that is not only attractive but leverages them
in a way conventional financing cannot.
I would like to take a brief moment and share one of our
many successes of the 504 loan program.
A couple dreamed of owning their own business and being
their own boss. They purchased a cafe in September of 2011 in
Fort Myers. That cafe continued to grow and flourish over the
years.
They were leasing their building until the owner of the
building sold, and they had a very short time period to
relocate. They did so, and right as they did, Hurricane Irma
hit. They were faced with trying to relocate and dealing with a
decline in diners and tourists which negatively impacted their
business.
They had an opportunity to purchase a building on Fort
Myers Beach perfect for their growing business. However, with
declines in revenues due to the hurricane and the money they
had to utilize for relocation, being able to purchase a
building with 20 or 25 percent down just simply was not an
option.
Along with a third-party lender, we were able to secure a
504 loan for these entrepreneurs. They were able to reopen as a
full-service restaurant, creating seven new jobs.
I am proud that SEDCO can bring these resources to Florida
entrepreneurs. However, during my time with the CDC, I have
seen some policies that are not helpful to my small-business
borrowers but also do not seem to protect the taxpayers' loan
guarantee in a meaningful way. I hope Congress and SBA will
review them and consider improving them to better meet the
needs of our small-business owners.
One way to help small-business owners is to allow a more
robust refinancing option in the 504 loan program. Thanks in
great part to the leadership of this Committee, small-business
owners can now refinance existing conventional loans using a
504 loan. That has been invaluable to many businesses and jobs.
However, there is an important exclusion from 504 refinance
eligibility, and that is other small-business loans from
government-guaranteed programs. A small-business owner that
purchased their building with a government product is now
barred from refinancing via the 504. This refinancing barrier
does not exist for other government-guaranteed lending
programs. As a result, this subset of small-business owners
cannot take advantage of the 504 loan program with the low 20-
and 25-year fixed rates.
These borrowers would still need to meet all of the
eligibility requirements that any other small business would.
Thus, the soundness and quality of the refinancing program
would not change if they participated. Ensuring that 504
refinancing is an option available for these small-business
owners would give them an additional tool when deciding what
best meets their needs, while not increasing a risk to
taxpayers.
Congress, SBA, and CDCs all have a shared goal of
supporting small businesses while ensuring proper use of
taxpayer dollars. The 504 loan program is a wonderful example
of that. It creates jobs while at no cost to the taxpayer. The
opportunities for change that I have outlined in my written
testimony as well as illustrated today will help keep that
proper balance, and I urge Congress to consider them.
Again, thank you for inviting me to testify today, and I am
happy to do my very best in answering any questions that you
have.
Chairwoman CHU. Thank you.
And thank you to all of our witnesses. We appreciate all
that you have shared with us.
We will now begin the questioning, and I will begin by
recognizing myself for 5 minutes.
Mr. Williams, I am the proud author of the CREED Act, which
was enacted into law in 2015. It reinstated the ability for
businesses to refinance their loans under the 504 program. So
it is my priority to ensure that SBA is implementing this
program effectively.
Under current regulations, the 504 program cannot be
accessed to refinance any government-guaranteed loans,
including other SBA loans. What are some types of government-
backed loans that could be refinanced under the 504 program if
this restriction were removed? And how would that change impact
small businesses?
Mr. WILLIAMS. Thank you for your question. And I think it
is a very important question, as this is a high priority for
our industry and our trade association. And we also want to
thank you for your leadership in getting this passed in the
first place.
As my colleague Brooke mentioned, this is very important
for small businesses, and it would open up all government loan
programs to be eligible for refinance, just as all other loan
programs can refinance our debt. So it would balance the
equation as we look at it.
And provided it is in the best interest of the borrower and
also not disadvantageous to the taxpayer, that is what is
important for us. And, again, as mission-based lenders, it is
our responsibility to make sure we are doing what is in the
best interest of both of those parties. So we look at it as,
you know, all programs will be eligible.
The other point I would like to make, Chairwoman, is that,
under the existing 504 debt refi with the expansion that we
have had longer than the 504 debt refi program, we can already
refinance existing government-guaranteed debt. And that has
been allowed for a while, you know, since 2009. It is just in
this other program, the permanent refi program, that we cannot.
So, in some respects, the horse has already left the barn,
you know, so it is time to, you know, kind of catch up, is the
way I think our industry looks at it, and simplify the
discrepancies among the programs.
Thank you.
Chairwoman CHU. Thank you for that.
Ms. Mansfield, in places like my home State of California,
rising real estate prices means that some small businesses
struggle to secure the capital that they need to grow their
businesses for their real estate.
Under current law, certain businesses like small
manufacturers are eligible for a larger SBA-backed debenture
than typical 504 applicants, which allows them to redirect more
of their resources towards growth and employment.
How would increasing the debenture limit for real estate
projects to at least match the limit for small manufacturers
impact business in higher-cost States like California?
Ms. MANSFIELD. Well, coming from Massachusetts, I know a
little bit about rising real estate prices, so I would be very
excited to see this pass as well.
Any time we can help a small business by putting more funds
through the 504 program, it is going to give them a longer
term. It is also going to have the fixed interest rate for
them. So we would be very excited to see they can utilize that
program and save their funds for working capital purposes
within their company.
Also, job creation. Again, as we mentioned, job creation is
a big component to the 504 program. If we can get more money
out there to that small business, it also means they are going
to create more jobs for our economy.
Thank you.
Chairwoman CHU. And, Ms. Mansfield, I have heard from CDCs
in California that the refinancing process for 504 loans can be
onerous. For example, SBA requires that refinancing applicants
provide copies of original purchase agreements, closing
statements, promissory notes, and grant deeds.
For small businesses that have refinanced their debt
previously, it is possible that the bank that originally issued
the loan may no longer even be in business. So businesses in
this position are then excluded from the 504 refinancing
options.
So, based on your experience, how can SBA improve the
documentation requirements for small-business owners in the 504
refinancing process?
Ms. MANSFIELD. Thank you.
Again, simplification of the documentation. As you said, it
is quite possible that some of these banks are no longer in
business or they have merged and it is actually impossible to
get some of these original documents. And requiring a borrower
who has had a loan out there for 10 or 15 years that they want
to refinance be able to provide original documentation is a bit
onerous for them. You know, they are not in the business of
keeping all of that documentation from an original loan.
So anything we can do to eliminate that requirement would
go a long way for helping more businesses be able to take
advantage of the refi program.
Chairwoman CHU. Yeah, Mr. Williams.
Mr. WILLIAMS. I just wanted to add, it also kind of removes
the barrier that small businesses see with SBA financing, the
stigma associated with paperwork, you know, redundancy. And it
simplifies that image and that reputational risk that the
agency has.
And I know as my colleagues and I have discussed, the
agency accepts certifications for a large number of things with
respect to, you know, a loan transaction--certifications from
borrowers, certifications from lending partners, certifications
from CDC partners. This would be another way to help
streamline, simplify, without adding undue burden to the
taxpayer.
Chairwoman CHU. Thank you.
Well, my time has now expired, and the Ranking Member, Mr.
Spano, is now recognized for 5 minutes.
Mr. SPANO. Thank you, Madam Chairwoman.
Interesting stuff. Thanks so much for your testimony.
I have a number of different things kind of bouncing around
in my head, but, well, I will start with this. I mean, we have
talked about, kind of, several areas where we think there might
be some improvements, right, that could be implemented. What I
would like to get from each of you, kind of without commentary,
but just list for me, in each of your specific individual
opinions, what is the single largest issue facing CDCs today.
Ms. Mansfield?
Ms. MANSFIELD. For me, I would think it would be
streamlining the closing process----
Mr. SPANO. Okay.
Ms. MANSFIELD.--would be the largest.
Mr. SPANO. Mr. Williams?
Mr. WILLIAMS. Streamlining the closing process and
improvements to debt refi.
Mr. SPANO. I only gave you one.
Mr. WILLIAMS. I am sorry.
Mr. SPANO. That is okay. I am just kidding. I was just
kidding. I am just kidding.
Ms. Fairman?
Ms. FAIRMAN. Debt refi.
Mr. SPANO. Okay.
Ms. FAIRMAN. Barely.
Mr. SPANO. Ms. Mirenda?
Ms. MIRENDA. I would say streamlining the closing process,
because that can affect borrowers and affect closings, and that
is a pretty big deal for our small-business owners.
Mr. SPANO. All right. So three of the four of you agree
that streamlining the closing process is the number-one issue.
Why is it that we have inconsistencies in the closing
process, in your opinion? Honestly.
Ms. Mansfield?
Ms. MANSFIELD. Sure. I have been involved with 504 loan
closings for quite some time, and we first talked about
streamlining, I believe it was, back in 1997.
Mr. SPANO. Uh-huh.
Ms. MANSFIELD. And it seems that some streamlining has
occurred, but it has not been for the benefit of the small
business.
Mr. SPANO. Okay.
Ms. MANSFIELD. So I think we need to change the mindset and
look at how the small business is impacted with all of this
documentation and what would really affect them and help them
out to get these closings done more smoothly.
Mr. SPANO. When you say ``streamlining,'' are we also
referring to differences in the process in regions around the
country? Inconsistencies in the various regions around the
country? Is that one and the same?
Ms. MANSFIELD. That has been my experience, that closing
alone, for instance, in the New England area is different than
my CDC counterparts in other parts of the country. We have a
very good process where we are, but I have heard that is not
the case throughout the country.
Mr. SPANO. And, Ms. Mirenda, is there anything as it
relates to the various regions around the country that would
justify or warrant, potentially, the differences and the
inconsistencies around the country?
Ms. MIRENDA. I wouldn't say so. I, you know--only, you
know--I know, Mary, you are a multi-State. So, you know, for
us, we are just Florida, so we deal with certain district
councils, and we deal with the same ones, so our closing
process is streamlined, as far as that is concerned.
Where I come into play when I talk about streamlining is we
are an ALP lender, which is Accredited Lender Program, which
means we go through a pretty intensive process to be an ALP
lender with the SBA, I mean, from financials, to governance, to
looking at loans. And because of that, we would hope that we
would have some leniencies when we decrease a loan by $4 to not
have to go to the SBA for approval for those types of things.
Mr. SPANO. Uh-huh. Uh-huh.
Ms. MIRENDA. So, you know, just some leniencies there by
being an ALP lender.
Mr. SPANO. Can you walk me through, just very quickly, a
typical closing process and what that looks like and how--I
mean, you just gave me one instance, you know, but how, if
there was a streamlined process, how that would positively
impact----
Ms. MIRENDA. Sure. So you have, you know, from application,
you then get an authorization. Any changes made to that
authorization is called a 327 action. So when you are in that
process where you are from authorization to 327, any time there
is an outstanding 327, lenders will not close the loan, because
they want SBA's blessing to make sure we are all good to close.
Mr. SPANO. Uh-huh.
Ms. MIRENDA. Obviously, you know the lenders are holding
sometimes 90 percent of financing for up to 2 years. So that is
a risk to the lender. So they want to ensure that SBA says,
yes, that we are going to get to the finish line. And so, you
know, those 327s can hold up closing.
Now, once we get all those approved, we go to closing, we
fund, and we move on, and, you know, it goes to funding, and
then we go to debenture or sale. But that can be a pretty long
process. And, you know, I would say banks, credit unions, and
third-party lenders want to ensure, you know, they are not in
any kind of, you know, high-volatility commercial real estate
by financing up to 90 percent.
Mr. SPANO. Uh-huh.
Mr. Williams, you look like you had a----
Mr. WILLIAMS. Yeah, I will just add that, you know, there
are various district councils that SBA has around the country
that are involved in this process that receive closing packages
from the CDCs around the country. And each of those councils
has the discretion to have a cut-off date to receive closing
packages.
So, you know, there is variance around the country to
receive those packages, to get them into a funding cycle for
the next available bond sale for us. So, you know, borrowers
are treated, you know, disparately around the country because
of that.
Mr. SPANO. And, to your opinion, have you been offered any
explanation as to why there are these variances?
Mr. WILLIAMS. Not publicly anything from SBA.
Mr. SPANO. Uh-huh.
Mr. WILLIAMS. And that is part of the challenge, is that
borrowers are treated, you know, disparately in that process.
And each district council can also add, you know, other things
that they might want to see outside of a standard checklist.
Mr. SPANO. Thank you.
Madam Chair, I yield back.
Chairwoman CHU. Thank you.
The gentleman's time has expired, and I would now like to
recognize a member of our Subcommittee, Mr. Tim Burchett.
Mr. BURCHETT. Thank you, Chairlady. You got my name pretty
close, so I am just going to----
Chairwoman CHU. I have learned my lesson.
Mr. BURCHETT. Thank you. Thank you. My wife has told me to
quit doing that to you all, so I am not going do it. Just not
going do it.
Thank you, Chairlady and Ranking Member Spano.
I always wondered, though, when you say, ``I am going to
recognize myself,'' why you don't say, ``Self?'', and then you
say, ``Well, thank you,'' and then you recognize yourself but
you really don't. I just--it is one of my pet peeves I just
want you all to know about, okay?
But thank you all for being here.
The 504/CDC loan goes a long way towards helping folks grow
and economic development, and it creates jobs and helps our
small businesses across the country, and I realize all that,
but the folks in my district in east Tennessee use this loan
program to do just that. And, with that, I have a couple of
questions.
Ms. Fairman, can you share with the Committee what a small
business experiences when they walk through your CDC? And who
do they meet with? Who is their point of contact?
Ms. FAIRMAN. We have a staff of 15, and the small-business
owner is introduced to one of our business development
officers, who goes through the program with them and explains
the rules and requirements to them.
So they work with someone who handholds them through the
process and puts them at ease and reassures them that they
don't have to worry about the rules and the regulations, that
that is what our organization does on their behalf, and we
advocate for that business.
Mr. BURCHETT. Yeah. I would say it is kind of a daunting
task when they walk in, a little overpowering, so I appreciate
that very much.
Ms. Mirenda, you mentioned a few different success stories
of small businesses that you all were able to keep afloat due
to the loan program in your testimony. Is that a common
situation for all the borrowers of 504 CDCs, ma'am?
Ms. MIRENDA. I don't know if it is common. I would
certainly say that there is definitely a need out there for our
small-business owners, especially when they are trying to
expand and grow their business. Commercial real estate is a
good investment for small-business owners, and they see that
value as something that they can utilize and be able to
continue to grow their businesses.
So I would say it is, you know--it is not common to--you
know, we sometimes will--we will save a business owner for
sure, where there is a business owner that--I have one in my
written testimony, if you will read that. It was a refinance,
and without that refinance, they would not be in business
today. So that does happen on occasion for sure, and we
certainly try to do what we can to help them.
Mr. BURCHETT. Do you all--and I come from, sort of, the
Dave Ramsey, sort of----
Ms. MIRENDA. Oh, yeah.
Mr. BURCHETT.--you know, paying off. You know, I tried to
spread those values to my family, which my wife agrees, so we
get out of debt.
But do you all, you know--and I hear folks come in and they
say, ``Oh, it is not bad debt; it is good debt.'' Well, to me,
it is all bad debt. It is a sucker's bet, is what it is.
Because, you know, the Bible says, you know, you are a slave to
the lender.
And I wonder, do you all push that, the getting out of
debt? Or do you just refinance?
You know, because I have talked to folks all the time and
they say, ``Well, I got a great deal on this car.'' And then I
say, ``Really? How is that?'' ``Well, I refinanced and I got my
rates lower than my last car.'' But they are going to be paying
for it for, you know, 672 more payments and that little beauty
is going to be all theirs.
So do you all encourage paying down, or do you go the other
route?
Ms. FAIRMAN. We always encourage repayment. But----
Mr. BURCHETT. Well, I am sure, but, I mean----
Ms. FAIRMAN. But----
Mr. BURCHETT. But getting out of debt and getting off the--
--
Ms. FAIRMAN. We all want the money back. But I think that,
unfortunately, debt is required in order for businesses to
grow. And so the mission of the industry is to put responsible,
reasonably priced debt into the hands of small-business owners
so that they have that opportunity.
And by the way the program is structured, whenever we make
that debt affordable to them, they are able to save other cash
for growing and helping the economy. So debt is a necessary
part of business growth.
Mr. BURCHETT. You don't think it would be saving their own
money and reinvesting and being intuitive about things in the
way to go with their money is a better route than debt, though?
Ms. FAIRMAN. I don't. I think that for businesses that are
starting out it is so expensive to buy real estate, it is so
expensive to buy machinery and equipment. It is an expensive
business climate, and businesses can't save up $5 million to
buy a new building. If we make this money available to them in
a responsible manner, then we allow them to grow faster, with
some assurance that we are going to get our money back.
The industry monitors portfolios well enough to know that
we are doing everything we can to help those small businesses
repay those loans.
Mr. BURCHETT. All right.
My time is up. Thank you, Chairlady, Ranking Member.
Chairwoman CHU. Thank you.
And we actually have time for a second round of
questioning, if any of you have more questions. I certainly do,
so I would like to ask these questions.
Ms. Fairman, I would like to go to the 50-percent occupancy
issue. The current law requires 504 borrowers who purchase an
existing building to occupy at least 51 percent of the
building. But this requirement prevents small businesses from
ever buying buildings with two floors that are evenly split.
Ms. FAIRMAN. Right.
Chairwoman CHU. So could you expound on the implications of
this rule and what kind of situations businesses have found
themselves in and if lowering the occupancy requirements would
benefit the 504 program?
Ms. FAIRMAN. So the easy answer is, yes, it would help many
small businesses be able to occupy buildings that they
currently are not able to finance under the 504 program.
Basically, businesses nowadays function differently than
when some of these rules were written, and while they might
have been reasonable in that time period, they are not
reasonable now. Businesses that need to buy multistory
buildings in order to get into an area where they can better
perform their services and provide economic benefit are limited
by these rules that are so old and outdated.
Chairwoman CHU. Ms. Mansfield, there is even a more
difficult situation in the urban areas, because the 50-percent
occupancy rule would prevent business owners from having mixed-
use developments, which is very popular right now, where
businesses occupy the ground-floor storefront and there are
apartment units on floors above.
How would a special rule allowing small businesses to
purchase mixed-use buildings benefit small businesses in those
urban areas?
Ms. MANSFIELD. It would greatly benefit the small
businesses in the Boston and surrounding areas. Before coming
here, I took a look at our statistics, and over the history of
Bay Colony since 1981, we have only done 53 loans in the
greater Boston area. And I believe, because of that, there are
small businesses that we just weren't able to help.
Again, we see a lot of these mixed-use businesses where you
have a first-floor commercial property and the second floor is
an apartment, and with the current 51-percent occupancy rule,
we just can't help them. And it is a shame.
Chairwoman CHU. This question is for both Mr. Williams and
Ms. Fairman. 504 regulations limit small businesses to
refinancing up to 50 percent of a project's cost, but there is
confusion because the same rules do not apply for banks, which,
of course, can go above 50 percent.
So could you describe how this limit impacts the ability of
small businesses to pursue financing under 504?
Ms. FAIRMAN. It causes us to get into numbers and
evaluations that are not helpful whenever we are reviewing
prospective clients and businesses that need financing. Banks
have a lot more flexibility and can do things that the program
will not allow us to do with 504.
Mr. WILLIAMS. And I think that, again, there is confusion
because this limitation is in the 504 debt refi with the
expansion, and the limitation applies that there is a 50-
percent cap of the debt refi, and the 50 percent applies to the
new project cost. So it is always difficult to explain to a
borrower and a lending partner, because it is just not a
calculation that is intuitive or easily available in the
marketplace.
So, you know, if you have a project that is $500,000 in new
project costs, you are restricted to only refinancing $250,000
in existing debt. If you have a half-a-million dollars in debt
on that project and $500,000 in new project costs, then you
have a problem.
You know, so you want to help the borrower, but you have
restrictions, and it just complicates things. And it is not
what the marketplace does.
Chairwoman CHU. Yeah.
Mr. WILLIAMS. And it is not what the other debt refi
program does.
Ms. FAIRMAN. And if I can add, the irony is that the
program is based on business expansion and growth, and it is
the expanding business that faces the restrictions in being
able to access the program fully by these rules that are in
place.
And so it is counterintuitive that we want businesses to
expand but, when they try to refinance their existing debt, we
tie their hands and make it more difficult for them.
Mr. WILLIAMS. And, again, pursuing the mission of assisting
small businesses, we are nonprofit lenders. Our mission is to
assist small businesses while preserving the taxpayer. And so
there are much better ways of going about doing that.
Chairwoman CHU. Thank you so much.
My time has expired, and now I would like to recognize the
Ranking Member, Mr. Spano, for 5 minutes.
Mr. SPANO. Thank you, Madam Chairwoman.
Just playing devil's advocate--I am an attorney, and so I
like to do that--what was, potentially, the rationale in
preventing borrowers from jumping from 504 program and
refinancing with one of the other government loan programs? Any
ideas as to what that rationale may have been?
I have one in my mind, but I wasn't here during the history
of the passage of the legislation. Any ideas on why they would
have prevented that, if any, or do you think it was an
arbitrary decision?
Ms. FAIRMAN. I am not aware of any explanation for that.
Mr. SPANO. Yeah. One thing that occurs to me is that maybe
they wanted someone else to have an opportunity to have a
government loan. Right? So someone has already received the
benefit of a 504 loan, and now we are giving them a second bite
at the apple, whether they probably need it, and I am sure in
many cases they do. It is helpful. But that keeps someone else,
some other small business out there who might benefit from a
small loan--that is just a thought.
I don't know if you have any opinions on that. Is that a
possibility?
Okay. All right. Good enough. You can only ask, right?
The other thing, too, is, getting back to the occupancy
requirement--so we can probably, I think, all agree that 50/50
certainly should happen. Right?
I think you, Mr. Williams, said, well, it should probably
be lower than that. So what should that number be in the best-
case scenario?
Mr. WILLIAMS. I think we are open--as an industry, I think
we are open to discussions with the Committee and trying to
come up with something that might work in urban areas. I don't
think we have, you know, something hard and fast in mind.
Just in multistories, that percentage is going to start
going down pretty dramatically as soon as you add another
story. But the reality is, small businesses operate in these
buildings because of scarcity of real estate and the highest
and best use of property. It is just a fact of the marketplace.
But these small businesses still, you know, deserve access to
financing and access to ownership.
So I think we would like to work with the Committee to come
up with something that would work and still fulfill the mission
of the program without jeopardizing the taxpayer. But I don't
know if we have a hard-and-fast rule right now----
Mr. SPANO. Yeah.
Mr. WILLIAMS.--but I think it is certainly something that
we can have a discussion about.
Mr. SPANO. Uh-huh.
Does anybody else have anything to add?
Ms. MIRENDA. I would like to add something.
Mr. SPANO. Yes, Ms. Mirenda?
Ms. MIRENDA. So one of the things that we have to do when
you underwrite a small-business owner, we have to look at cash
flow, right? In a 504, we can't take any cash flow generated
from any business--so if they are at 51 percent and they are
leasing out 49 percent, it doesn't matter what they are paying
that business for lease, we have to underwrite it. It is a
rule. We cannot take that, you know, lease.
So it protects us. At the end of the day, even if it is 40
percent, that is what protects and, I would say, makes the
program great, because we are not lending to investors. That is
the big concern, I think, for SBA, is we are not lending to
investors. We don't want to lend to people who are just out
there buying real estate, commercial real estate, and leasing
the whole building out. And so our small-business owner, we
have to--we do site visits. There are things that we have to do
to be a CDC to ensure that we are maintaining the integrity of
the program.
Mr. SPANO. Yeah. Thank you. That is very insightful. I
wasn't aware of that. So they have to be able to justify their
ability to repay the loan based on the business that they are
actually operating----
Ms. MIRENDA. Correct.
Mr. SPANO.--not some type of a real estate investment.
Ms. MIRENDA. Correct.
Mr. SPANO. Got it. Thank you.
Madam Chair, I yield back.
Chairwoman CHU. Well, thank you all so much. I want to
thank all the witnesses for taking time out of their schedules
to be with us today.
And I would like to make my closing statement.
SBA's loan program, including the 504 program, is designed
to fill the gaps left by the private markets, providing loans
to small-business owners who cannot afford or obtain loans from
conventional lenders. The 504 program takes this one step
further by targeting small businesses with unique capital
needs--the purchase of major fixed assets, such as land,
buildings, and equipment.
Ensuring that this program is effectively reaching and
serving small businesses at this critical stage of growth is a
priority of this Committee, and this hearing has provided
important information and testimony that will help us do just
that.
I look forward to continuing to work in a bipartisan
fashion to enhance the 504 program and ensure that small
businesses have access to affordable capital.
I would ask unanimous consent that members have 5
legislative days to submit statements and supporting materials
for the record.
Without objection, so ordered.
And if there is no further business to come before the
Committee, we are adjourned. Thank you.
[Whereupon, at 10:57 a.m., the Subcommittee was adjourned.]
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