Last week the U.S. House of Representatives passed the "Small Business Lending Fund (SBLF) Act," H.R. 5297, by a vote of 241 – 182. The act will help small businesses secure capital through new community bank incentives, gain support for state lending initiatives, and open venture capital markets to small businesses.
In addition to the new $30 billion lending fund for community banks that is intended to provide $300 billion in lending to entrepreneurs, Rep. Glenn Nye (D-VA) and Rep. Kurt Schrader (D-OR) have made amendments to the bill. Rep. Nye authored safeguards in the bill that will require banks to substantially boost their small business lending to qualify for funds, and Rep. Kurt Schrader (D-OR) will establish a new borrower assistance program that provides additional funds to small businesses who take out loans. Such funds can be used at the entrepreneur's discretion to reduce their interest rates, defer their loan, or cover monthly payments.
The Act also contains provisions aimed at reinvigorating investment in small startups through the establishment of a new "Small Business Early Stage Investment program" where funds from the SBA will be paired with private capital to invest in small startups.
"In a world where revolutionary new products are conceived in dorm rooms and companies are born in garages, we need new ways of meeting businesses' capital needs," said Rep. Nydia M. Velázquez, the Chairwoman of the House Committee on Small Business. "The Small Business Early Stage Investment program recognizes this fundamental shift, taking steps to meet the capital needs of new businesses and helping them create jobs."