Boxer Introduces Bill to Help Small Businesses Get Needed Credit

Legislation Increases Access to Working Capital for Small Businesses

Washington, D.C. – U.S. Senator Barbara Boxer (D-CA) introduced legislation this week to help small businesses that have struggled to access credit due to the financial crisis. The Working Capital Express Act would encourage banks to extend credit to more small businesses through the Small Business Administration’s SBA Express program.

“Access to credit is critical to keeping our small businesses afloat,” Senator Boxer said. “By easing the credit crunch on Main Street, we will help small businesses create jobs and jumpstart our economic recovery.”

Small businesses rely on credit lines to fill orders, meet payroll and grow their businesses. But due to the financial crisis, many small businesses have lost their previously established credit lines. As the economy recovers, banks continue to be reluctant to lend. Over 60% of small businesses report that credit has become more difficult to obtain, and 54% of small businesses lack a credit line completely – up from 38% in mid-2008.

The legislation would create a new track within the SBA Express program – called Working Capital Express – with a higher federal loan guarantee. By increasing the loan guarantee from 50% to 80%, the bill would encourage banks to extend credit lines to more small businesses. The legislation would also increase the maximum size of the loan under the program from $350,000 to $750,000.

This new track would be limited to existing small businesses that can demonstrate their ability to pay back the loans. The bill is deficit neutral and will not create additional costs to taxpayers.

The legislation has been endorsed by the National Small Business Association, Small Business California and the National Association of Government Guaranteed Lenders.