Prepayment Of Sec 503 Development Company Loans And The Sec 504 Business Development Company Loan Program

Author : United States Senate Committee on Small Business
Publisher : Forgotten Books
ISBN 13 : 9781330443101
Total Pages : 100 pages
Book Rating : 4.4/5 (431 download)

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Download or read book Hearing Before the Committee on Small Business, United States Senate, One Hundred Third Congress, Second Session written by United States Senate Committee on Small Business and published by Forgotten Books. This book was released on 2015-06-27 with total page 100 pages. Available in PDF, EPUB and Kindle. Book excerpt: Excerpt from Hearing Before the Committee on Small Business, United States Senate, One Hundred Third Congress, Second Session: On Sec; 503 Development Company Loans and the Sec; 504 Development Company Loan Program, Tuesday, May 17, 1994 The Committee met, pursuant to notice, at 10:10 a.m., room SR-428, the Russell Senate Office Building, Hon. Dale Bumpers, Chairman of the Committee, presiding. Opening Statement Of Hon. Dale Bumpers, A U.S. Senator From The State Of Arkansas The Chairman. To Senator Hatfield and all of the witnesses, I apologize for being late. I am going to forego my statement and try to make up for a little bit of the lost time. Everybody knows we are here to consider a bill by Senator Hatfield, which he has been trying to get passed for a number of years. I personally prefer his bill to the administration measure at this point. I am anxious to hear from the witnesses on what I consider to be a very important initiative we must get passed this year. Senator Burns, do you have an opening statement? (The prepared statement of Senator Bumpers follows:) Prepared Statement of Senator Dale Bumpers Today's hearing will consider legislative proposals to ease an unfair burden which has been carried for several years by small business borrowers in the SBA Development Company Loan program. Recently, I introduced S.2061, the Clinton administration's bill to modify prepayment penalties for SBA Sec.503 borrowers. Senator Hatfield introduced his bill on the same subject, S. 737, last year. Both of these bills aim to help a relatively small group of business owners who received long-term, brick and mortar financing through the SBA in the early 1980 s.Interest rates then were more than double what they have been in 1993 and 1994, and many borrowers have been paying the government 12-15 percent interest and more for over a decade. These people would like to refinance their obligations, or simply pay them off, just as millions of American homeowners and business owners have done in the last 2 years. Sec.503 borrowers, however, are virtually precluded from doing so by a clause contained in the original loan which imposes a huge prepayment penalty on any borrower who seeks to pay the loan off before its term is up. The 503 prepayment penalty is far out of proportion to prepayment penalties in commercial loans, and even out of proportion to other government loan programs. It is simply unconscionable, to my way of thinking, for this government to charge any taxpaying citizen that kind of interest in this day and time, and it is even worse to say that the borrower may not pay the loan off early just because the government needs the money. Many investors would love to be in the position of the Federal Financing Bank today holding long-term notes with interest rates of 12-15% where the borrower is on the hook for the entire term. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.