U.S. Rep. Ed Case, D-Neighbor Islands-rural O‘ahu, last week voted against cutting into the U.S. Small Business Administration’s $80 million 7(a) program, also known as the “guaranteed-loan” program. The House voted to thwart Bush Adminstration cuts and save the fund
U.S. Rep. Ed Case, D-Neighbor Islands-rural O‘ahu, last week voted against cutting into the U.S. Small Business Administration’s $80 million 7(a) program, also known as the “guaranteed-loan” program.
The House voted to thwart Bush Adminstration cuts and save the fund intact, which is the most popular loan program in the country, Case said.
“In my own state of Hawai‘i, for example, the viability of small business is the linchpin to economic vitality,” Case said in an adamant speech on the floor of the House. “In 2002, the most recent year for which numbers are available, the SBA Office of Advocacy estimates that there were 28,800 small businesses in my state, representing 96.7 percent of all business in Hawai‘i.”
“By supporting, nurturing and growing small businesses,” Case argued, “we are allowing these companies to increase in size, revenue, employment and purchasing power, ultimately benefiting the community where that company is located as well as the country as a whole.”
Hawai‘i earned 269 “guaranteed” 7(a) loans through May of last year, worth nearly $29 million, and $15 million found its way to Case’s constituency on the Neighbor Islands.
Kaua‘i got 22 SBA guaranteed loans, according to officials with the SBA on O‘ahu.
Although the value of Kaua‘i’s loans is unknown, a Kaua‘i Small Business Development Center (SBDC) official said that Kaua‘i’s businesses need these loans when they can’t get traditional bank loans.
“These loans are so important because they offer small businesses a chance to get loans not normally available, or give help to people looking for extra capital, or expansion,” said Clara Kaneshiro, administrative assistant with the SBDC here.
Last year, Kaua‘i’s SBDC got 23 loan requests for their SBA-funded, guaranteed-loan program, and 12 were funded to a tune of $71,000 for mostly service-oriented businesses.
Kaua‘i’s SBDC draws from the state SBA’s total 7(a) fund. Their loans are often much smaller than SBA loans, and are counted as separate. In other words, one can apply for loans direct from the SBA at their Pacific Gateway Center satellite office here, and/or from the SBDC, which is located at Kaua‘i Community College.
Most SBDC loans go to small, service-oriented companies, while SBA loans are often used for much larger capital-improvement projects, or the purchase of a building, land, etc.
“According to the Federal Reserve Board, there were 13 small-business-friendly banks in Hawai‘i in 1998,” Case argued yesterday.
“In 2002, that number had shrunk to seven. Of those seven in 2002, four had assets between $1 billion and $10 billion. Because small business traditionally depend on local banks’ services and use commercial bank lenders, this recent consolidation has not had a positive effect upon lending to small businesses.”
Minority-owned businesses represented 57.8 percent of the state’s businesses, Case argued, and generated $14.8 billion in revenues in the most recent year for which the data was available.
