Statements
Statement of the Hon. Sharice Davids on Catalyzing Economic Growth through SBA Community-Based Lending
Washington,
March 29, 2022
The COVID-19 pandemic highlighted long-standing inequities in the small business lending market. In March of 2020, Congress stepped in to support small businesses through the Paycheck Protection Program. Under PPP, banks and other private lenders made fully guaranteed SBA loans to small businesses hurt by the virus. Over the life of the program, PPP delivered over $800 billion in emergency loans. This aid helped small businesses keep employees on payroll and pay necessary expenses like rent and utilities. But as we heard last week in our oversight committee, it became clear that access to the program wasn’t equal for everyone. Prior relationships with big banks led to the exclusion of the smallest of small businesses, putting them at risk of closing permanently. Both the GAO and outside experts found these changes proved to be effective in making the program more accessible. In later rounds of PPP, the average loan size decreased substantially, and more funding reached businesses in underserved markets. In fact, many of the community lenders that helped deliver PPP to underserved businesses are already active in SBA lending programs. Programs like the 504/CDC Loan Program, SBA Microloan Program, and Community Advantage Pilot Loan Program are all delivered by community lenders. Each program has proven effective in helping deliver capital to underserved communities.
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