3 Ways to Benefit from Biden’s $25 Billion Small News Assistance Plan

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Because of Senate rules, a reconciliation bill can typically provide funds for no longer than 10 years, according to the Brookings Institution. Lawmakers, however, could try to make direct lending permanent if it works well, Cardin said. The provision was spurred by the experiences of founders who were “left behind” by the Paycheck Protection Program because they lacked banking relationships or their banks prioritized larger, more profitable loans, Velázquez said.  2. Boosts to the SBIC program

1. Direct lending for key SBA loan programs Senate Majority Leader Chuck Schumer (D-N.Y.) has said that congressional committees will have text drafted by Wednesday, just before lawmakers are out for Yom Kippur, according to Politico. Here are three major takeaways from the proposed legislation. 

The bill would allow the U.S. Small News Administration to make its popular 7(a) and 504 loans directly, instead of through a commercial bank, according to the lawmakers. It allocates about $4.5 billion over 10 years for 7(a) for direct lending, and $2.8 billion over 10 years for 504. Further, the bill allows for 7(a) loans of up to $1 million for manufacturing companies and up to $150,000 for other small businesses, Cardin said. Small-business owners would be able to go straight to the SBA (just as they do for an EIDL advance or loan) to access the capital. The funding is “aimed at our most challenged small businesses to provide justice in America in entrepreneurship,” Ben Cardin (D-Md.), the chair of the Senate’s Committee on Small News & Entrepreneurship, said during a call with reporters Tuesday. Cardin, along with House Small News Committee chair Nydia Velázquez (D-N.Y.) and vice chair Kweisi Mfume (D-Md.), discussed provisions of the bill that relate to small businesses.

3. Help with federal contracts The federal government is the largest buyer of goods and services in the world–and the bill’s backers want small businesses to get a greater cut.  Ideally, these changes would provide “ample access to affordable capital,” Velázquez added. More startup capital available from the government ultimately could mean more funding opportunities for your business. 

The new bill would create SBIC subprograms, called venture small business investment companies (VSBICs), per a House summary. One would invest $9.5 billion in “underserved markets and critical industries.” Another provision allocates $20 million for a mentorship program for less experienced fund managers. The goal is to ensure managers are sourced from underserved areas, geographically and otherwise, Cardin said.  An SBIC, or a small business investment company, is an investment fund licensed by the SBA that gives capital to U.S. businesses. SBICs borrow money from the SBA at favorable interest rates and bring their own money to the table to create a fund. 

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