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PRESIDENT CLINTON, CONGRESS REPLENISH SBA LOAN ACCOUNT, SMALL BUSINESS GUARANTEES FLOWING AGAIN

 WASHINGTON, July 8 /PRNewswire/ -- Authorizations for more than $755 million in approved U.S. Small Business Administration (SBA) loan guarantees began moving this week to commercial banks, just days after President Clinton signed a supplemental funding bill to replenish the agency's most popular small business loan program.
 The $755 million represents loan guarantees that have been approved for more than 3,340 small businesses since last April, when the agency's 7(a) General Business Loan Guarantee Program exhausted its loan authority for the year. Those loan approvals had to be held back pending approval of a supplemental appropriation to revive financing for the popular program.
 The bill signed by President Clinton last Saturday included an appropriation of $175 million for the 7(a) program, enough to finance $3.2 billion in guaranteed loans. That brings the total program level for fiscal year 1993 to $6.8 billion, a 21 percent increase over the record $5.6 billion set in fiscal year 1992.
 SBA Administrator Erskine Bowles said it shouldn't take lenders more than a few days to get more of that money into the hands of small business borrowers.
 "This will be a big shot in the arm for the nation's small businesses and for the national economy," Bowles said. "Simply put, it means more jobs."
 "It's no secret that small businesses are starved for capital," Bowles said. "Small business cannot grow and cannot create jobs without capital. But for a variety of reasons commercial lenders have not always been able to meet the credit needs of creditworthy small business borrowers.
 "That's why they have turned in record numbers to SBA," he said. "It is so important that we get this credit window open again. The $175 million appropriation will stimulate $3.2 billion in new loans, which will create or maintain more than 300,000 jobs, which will generate up to $600 million in new taxes for our country. I think that's a good return on your investment in anybody's book."
 The program, which started fiscal year 1993 with loan guarantee authority of just $3.6 billion, exhausted its allocation for the year in late April in the face of steadily increasing demand from credit-starved small businesses unable to obtain financing from commercial lenders without SBA's help. Before the program was suspended in April, demand for SBA loan guarantees was running about 31 percent ahead of the previous year.
 During the following 10 weeks, SBA continued to accept and process applications, which allowed the agency to immediately send approved loan guarantee authorizations to lenders when the new funds were approved.
 Bowles said he hoped to avoid the funding shortfall problem in future years by making better advance estimates of how much SBA will need and making every effort to get Congress to appropriate it. The proposed SBA budget for fiscal year 1994 includes enough funding to provide for $6.6 billion in guaranteed loans.
 -0- 7/8/93
 /CONTACT: Mike Stamler, 202-205-6740, or Diana L. Parra, 212-264-7752, both of SBA/


CO: U.S. Small Business Administration ST: District of Columbia IN: SU:

MP-OS -- NY055 -- 9519 07/08/93 12:59 EDT
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Date:Jul 8, 1993
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