U.S. Senator Gary Peters (MI), a member of the Senate Small Business and Entrepreneurship Committee, today cosponsored bipartisan legislation that would reduce burdensome paperwork and cut red tape for small businesses. The Microloan Act of 2015 eliminates three outdated provisions in the Small Business Administration’s (SBA) Microloan Program that have been unchanged since the program’s establishment in 1991 and only create unnecessary paperwork for small businesses and entrepreneurs.
“Small businesses and startups are the engines of economic growth in Michigan, and it is critical that the SBA’s Microloan Program is up to date and streamlined to help small businesses compete and succeed,” said Senator Peters. “I’m glad to cosponsor this commonsense, bipartisan legislation that eliminates unnecessary bureaucratic red tape for small businesses and allows them to focus more on innovating and serving consumers.”
“There are many organizations like Northern Initiatives who for over twenty years, have partnered with the Small Business Administration in building the microlending program,” said Dennis West, President, Northern Initiatives. “The bill that Senator Peters is cosponsoring will give Northern Initiatives and experienced microlenders more flexibility to use our gained knowledge and judgement to work on the technical assistance needs identified by our customers. The bill will enable Northern Initiatives to help more people in rural Michigan achieve their dream of starting and growing a business.”
The legislation eliminates three provisions of the Small Business Act. In doing so, the bill:
- Provides greater flexibility to microloan intermediaries in providing technical assistance and underwriting to current and prospective borrowers
- Promotes local decision-making by intermediaries by addressing the current law’s approach to third party contractors, permitting smaller intermediaries with smaller grants to secure part time assistance for essential services such as bookkeeping and accounting
- Streamlines SBA grant and loan making process by removing a provision in current law that requires SBA to limit assistance during the first six months of the fiscal year
The SBA’s Microloan Program was initially established as a pilot program in 1991. Since then, the program has grown to 137 active intermediary lenders who made more than $55 million in loans totaling $670 million to almost 4,000 small businesses across the country. In fiscal year 2014 alone, the Microloan Program made 95 microloans to Michigan small businesses totaling over $1.6 million, and helped retain or create over 300 jobs.
