The GOP is preparing to launch a new retirement fund aimed at boosting small business lending by boosting funding for small business loan guarantees.
The effort is designed to help small businesses to expand and diversify their operations, said Rep. Greg Gregory, R-Texas.
The $1.6 trillion Republican plan would provide loans to the smallest U.S. businesses, known as Small Business Investment Corp. or SBIs, which can loan money to small businesses for capital upgrades.
The SBI fund, which could be used to help start-ups, is set to receive $600 million, according to the House Republican budget, which was released Monday.
The House Republican plan also includes $1 billion in a $5 billion investment by the White House in the Small Business Administration.
The White House and the Treasury Department have not yet released details of the investment.
The investment is expected to boost the SBI loan guarantee program by $100 million, the House GOP budget said.
It also includes funding for the Small and Community Business Development Fund to support business start-up lending programs.
Small businesses have been a major focus of the GOP tax overhaul.
The GOP proposal aims to make SBI loans to companies with revenues of up to $500,000 and to expand loan guarantees for up to 100 SBI companies, to create more loans for small businesses and to increase the loan guarantee amount for companies that make more than $250,000 a year.
The plan also would make more loans available to companies that do not have a bank account and to help businesses get loans for equipment.
The Senate version of the bill would increase the $1,000 loan for small and medium-sized businesses and the $5,000 for small companies.
It would also increase the maximum loan to $50,000, increase the limit on loans for start- ups to $100,000 from $250 and add $5 million for small borrowers.
It includes the tax reform plan that President Donald Trump signed into law in May.
Gregory said he’s excited about the investment, but it doesn’t address the broader needs of small businesses.
He said he is hopeful the SBA fund will be able to serve as a “backstop” to the loan guarantees that the GOP is trying to put in place. “
I believe that this investment will help us grow the economy and increase jobs, but we will need to continue to do more to ensure that small businesses can access the best credit available.”
He said he is hopeful the SBA fund will be able to serve as a “backstop” to the loan guarantees that the GOP is trying to put in place.
He said there are more than 400,000 SBI businesses in the United States, which is “a very important number” to know.