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Washington Bureau- bizjournals.com Page 2 of 3 manufacturers to obtain larger loans through the 504 program will help address their need for capital, he says. • The legislation also increases 504 loan size limits for other types of small businesses. The House version doubles the regular SBA-backed loan maximum to$2 million, and increases the amount of money available for projects that fulfill a public policy purpose-- such as expanding minority business development--to $2.5 million.The Senate version increases these limits to $1.5 million and$2 million, respectively. The Senate bill also opens the 504 program to nonprofit child care centers, at the request of Sen. John Kerry, D-Mass. "This provision is intended to address a special need for child care, and it is not my intention to expand the program to other types of nonprofit organizations in the future," says Sen. Olympia Snowe, R Maine, chairman of the Senate Small Business and Entrepreneurship Committee. Both the House and Senate bills increase authorization levels for the SBA's 7(a) general business loans to $16 billion in fiscal 2004 and$16.5 billion in fiscal 2005. The amount that actually will be loaned through the 7(a)program depends, however, on demand from small businesses and how much money Congress appropriates to subsidize the government-guaranteed loans. Under the SBA budget approved by the House July 23, an estimated$9.3 billion would be available for 7(a) loans next fiscal year. About$7.85 billion in 7(a) loans were made during the first nine months of this fiscal year, • a 3 percent decline from the same period a year earlier. But the number of loans increased 37 percent as the average size of each loan fell from $232,075 to $164,600. Hubzones vs. minority firms Both the House and Senate bills also include numerous provisions aimed at giving small businesses a better shot at winning government contracts. The bills require the SBA to hire more procurement center representatives to identify contracting opportunities and make sure large government contractors follow through on their commitments to hire small businesses as subcontractors. They also direct the agency to implement a long-stalled program that would give women- owned businesses preferential treatment for government contracts in industries where women have been underrepresented. The House and Senate bills differ significantly, however, in their treatment of the Hubzone program, a contracting preference for small businesses that are located in low-income areas. The Senate bill expands the Hubzone program to include closed military bases, while the House bill includes two provisions that would "devastate"the program, says Ronald Newlan, chairman of the Hubzone Contractors National Council and co-founder of Global Solutions Network, a Hubzone-certified firm in Alexandria, Va. Under the House bill, minority-owned businesses in the 8(a)program would get priority for federal contracts over Hubzone firms. The House committee's ranking Democrat,Rep. • Nydia Velazquez of New York, says this language simply codifies current regulations. But the SBA told contracting officers in 2001 to give equal treatment to the two programs. http://twincities.bizj ournals.com/extraedge/washingtonbureau/archive/2003/08/04/bureau l.h... 8/4/2003