Kerry Presses Equal Lending Opportunities for Small Business Co-ops
WASHINGTON, D.C. – Senator John Kerry, the senior Democrat on the Small Business Committee, today sent a letter to the U.S. Small Business Administration (SBA) asking for a review of all current policies on lending to small business cooperatives and the establishment of clear eligibility guidelines for qualifying cooperatives.
“It is my understanding that many small business cooperatives are not currently able to utilize SBA lending programs due to regulations dating back to the 1960s which are currently subject to conflicting interpretations,” Kerry wrote in the letter. “I am concerned that too many lenders see the regulations as a broad denial of access for all cooperatives, even those that otherwise fit the criteria of being a small business.”
Last November, Senator Kerry introduced the Small Business Lending Act that would help to make more capital available to small businesses through the Small Business Administration (SBA), eliminate some SBA loan fees, and increase loan guarantees to help small businesses expand, create jobs, and strengthen the economic recovery.
The full text of the letter is below:
February 29, 2012
The Honorable Karen Mills
Administrator
U.S. Small Business Administration
409 3rd Street, SW
Washington, DC 20416
Dear Administrator Mills,
I am writing to express my concern with the challenges that many small business cooperatives have in gaining access to Small Business Administration (SBA) lending programs. I ask that you review all current SBA policies on lending to small business cooperatives and establish clear eligibility guidelines for qualifying cooperatives.
It is my understanding that many small business cooperatives are not currently able to utilize SBA lending programs due to regulations dating back to the 1960s that are currently subject to conflicting interpretations. I am concerned that too many lenders see the regulations as a broad denial of access for all cooperatives, even those that otherwise fit the criteria of being a small business.
Cooperatives play an important role in our economy and provide a unique opportunity for individuals to team together to form businesses in a way that they often wouldn’t be able to do on their own. According to the University of Wisconsin Center for Cooperatives, there are 29,000 cooperatives, with 120 million members, operating in 73,000 places of business throughout our nation. Overall, U.S. cooperatives account for more than $3 trillion in assets, over $500 billion in annual revenue, $25 billion in wages and benefits, and over 2 million jobs.
Small cooperatives face the same challenges that other small businesses do and are in need of fair lending opportunities. I appreciate the work of the SBA with the Cooperative Fund of New England through the Intermediary Lending Pilot Program and look forward to seeing additional lending opportunities for cooperatives in the near future, specifically through the 7(a) Loan Program.
Thank you for your attention to this important issue. I look forward to working with you.
Sincerely,
John F. Kerry
