SBA Hot Topic Tuesday — An Open Letter to The New Senate Small Business Committee Chairman

January 10, 2017

SBA Hot Topic Tuesday — An Open Letter to The New Senate Small Business Committee Chairman

By Mike Thomas
Founder & CEO, Thomas USAF Group, LLC

Senator Risch,

All of us in SBA & USDA lending are excited about you being the new Chairman of the Small Business Committee.

On December 8th, a group of us stopped by to see you when we were visiting Senators Isakson and Perdue, as we look to you as our third senator and a major spokesman for Small Business. As supporters of the Small Business Regulatory Flexibility Improvement Act, we also would like you to look at cutting down the burden that SBA places upon community banks. Community banks have always been the backbone of the SBA Loan Program, so it is a shame that SBA and NAGGL are turning on them in favor of the big, national banks. The proposed increase in the secondary market tax, Small Business Lending Oversight Act of 2016 — S 2992, and SBA’s new regulations on SOP’s create a greater burden on community banks.

A most obvious example of this is SBA’s tax on loan sales in the secondary market, in which the burden falls almost 100% on the community banks. Note: Community banks must use the secondary market for liquidity and regulatory reasons. Therefore, it is they who solely pay SBA’s burdensome tax. On the other hand, the big, multi-national banks, bacause of their low cost funds, do not sell in the secondary market and therefore evade this tax. The solution is simple…make all banks pay a larger service fee on their guaranteed loan amounts rather than tax the small bank that must sell for liquidity and regulation purposes.

In closing, “we are making America great with every loan” and we look forward to seeing you in the future and will call upon you when we next come to Washington.