The House Committee on Small Business today held a hearing on the state of credit for the small business community. Chairwoman Nydia M. VelÃÂ¡zquez, a congressional Democrat from New York, stated that despite stimulus funds and loosened rules for U.S. Small Business Administration-backed loans, credit for Main Street business is still moving slow.
"From the start-up in Silicon Valley to the mom and pop restaurant on Main Street, small businesses everywhere are struggling to find the capital they need to keep their doors open," VelÃÂ¡zquez states. "While the Recovery Act took important steps to help fix the credit markets, entrepreneurs still can't find the loans they will need to get the economy moving forward again."
Her office states that, despite more liberal guidelines for lending, loans backed under the SBA's most popular program, called 7(a), are lagging $5 billion below last year's levels. She states that the agency has been slow to implement new congressional mandates and that there will be likely be additional oversight by lawmakers.
"Eight years of inept management and underfunding have come home to roost at the SBA, preventing the agency from stepping up when we need it the most," VelÃÂ¡zquez said.