Markup Increases FY 2015 SBA 7(a)/504 Appropriation

By Charles H. Green

The Financial Services and General Government Subcommittee of the U.S. Senate Appropriations Committee put forth an encouraging markup bill yesterday appropriating a lower overall SBA budget ($896 million with higher authorizations for both the 7(a) program ($19 billion) and 504 program ($7.5 billion) for fiscal year 2015. The government’s budget year is from October 1 through September 30.

This level of 7(a) funding seems to provide sufficient room for growth next year, which is U.S. Small Business Adminstrationconsistent with the trajectory achieved year to date in FY 2014, where after a sluggish start, the program seems to be heading to reach its total appropriation of $17.5 billion by year end.

The 7(a) program got off to a slow start in FY 2014 start thanks to the government shutdown which shuttered the SBA for the first 17 days. Restoring the authorization to $19 billion would enable it to expand fully in the range of its record year in FY 2011, when more than $19.6 billion loans were approved.

More encouraging though maybe the $7.5 billion authorization included for the 504 program. That program is in disarray at the moment with flagging loan demand, Congressional gridlock on the question of reinstituting the 504 refinance authority and even a high profile change of command at NADCO, the 504 industry trade association.

The need for a significantly higher authorization isn’t reflected in current program usage, which is visibly slipping from FY 2013. There had only been about $2.6 billion loan approved through May 30th.

Apparently the appropriators are anticipating a recharged 504 program in FY 2015 led by restoration of the ability to refinance commercial mortgages. The effort toward 504 refinancing has been stuck in the House of Representatives for more than a year.

It’s a long way from a markup bill to the president’s signature, but this bill is a good starting point for SBA financing programs for 2015.

Read more at Senate Appropriations Committee. 

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