July 26, 2017
By Bob Coleman
Editor, C-Suite Wednesday
C-Suite Wednesday — Senate Restores USDA B&I Lending Authority
On June 30, I reported the House appropriated funding for rural Main Street that had been cut in the FY18 Budget. Last week, the Senate followed the House lead to restore funding to the USDA B&I Loan Program.
I interviewed Bill Broydrick about the USDA Business & Industry lending program.
Coleman Report: Tell me the backstory of the B&I lending budget.
Bill Broydrick: President Trump wanted to eliminate the entire Business & Industry Loan Program. A group of lenders got together and formed an ad hoc Coalition that has retained our firm, Broydrick & Associates, LLC, to try to put the genie back in the bottle if you will which we’ve been very successful at doing.
The Senate bill was just marked up last week, approved by the subcommittee and by the full committee actually keeps the same level of lending in FY ’18 as existed in FY ’17.
The House bill has a slight decrease in it too – they took it down to $33 million in the House and it’s at $35 million in the Senate bill — which is last year’s number.
The appropriation is used for two things; run the program and fund reserves for those few loans that wind up going south which have been guaranteed by the USDA.
Coleman Report: In terms of gross dollar amounts do you know what we’re talking about in both Houses?
Bill Broydrick: Yes, in the Senate it’s $919 million which is the FY ’17 number. The number in the House is slightly lower.
Coleman Report: Who are the lenders involved with this, Bill?
Bill Broydrick: The lenders have been Thomas USAF, Live Oak Bank and North Avenue Capital.
Coleman Report: Next steps, so where do we go from here?
Bill Broydrick: The bill has been approved by both the House and the Senate Appropriations Committee. Either one or both of the Houses will take the bill up in September when they’re back. Or, they could roll it into a bigger bill; or they could pass a continuing resolution.
A continuing resolution would have the language that would just continue the program as it was in FY ’17. Senate leader McConnell has told the Appropriations Committee that he assumes that the base amount should be the FY ’17 dollar. So we’ve gone from zero to back to the FY ’17 number in the Senate. The Senate has always been very interested in the program. The subcommittee chairmen in both Houses, Bob Aderholt from Alabama and John Hoeven from North Dakota, have been very supportive of the program.
Coleman Report: Bill, most B&I lenders are also SBA lenders. SBA currently has widespread bipartisan Congressional support. Does that support extend to this type of lending for rural America?
Bill Broydrick: Yes, it does, very much so. Let me give you an example. In the case of John Hoeven, a Republican senator from North Dakota, before he was governor he was President of the Bank of North Dakota. It’s operated by the state and it’s been all about rural lending from the very beginning.
We’ve gotten letters from all kinds of people all over the country from Kansas, from Florida pointing out individual projects that have been done in their states. Some in the pipeline could be messed up and maybe lost if the President’s proposal was adopted.
Coleman Report: Bill, if there’s a lender out there reading this and they want to get involved who should they contact?
Bill Broydrick: They should call me at (202) 637-0637 or email me at billb@Broydrick.com
Coleman Report: Excellent. Thank you for your time Bill.