WASHINGTON -- The House on Thursday passed a bill to raise limits on federally guaranteed loans to small businesses including auto dealerships to $3 million, putting pressure on the Senate to approve similar legislation.
The maximum allowed on federally guaranteed Small Business Administration loans to small businesses has been $2 million since 2000.
The legislation would affect the SBA's new floorplan financing program for auto dealers, which has had trouble attracting lender participation since its May launch.
The House measure also would provide federal guarantees of as much as 90 percent on these loans through the end of September 2010.
The vote was 389-32.
“In the 111th Congress, job creation is our No. 1 priority,” House Small Business Committee Chairwoman Nydia Velazquez, D-N.Y., who sponsored the bill, said on the House floor today. “It only makes sense to support legislation that gets us there.”
The Obama administration has been pushing for an increase in loan limits in an attempt to loosen credit and stimulate the economy.
Greater loan amounts mean higher profits for banks.
The administration wants loan limits of $5 million and permanent federal guarantees of 90 percent.
Those provisions are contained in a Senate bill introduced last week by Senate Small Business Committee Chairwoman Mary Landrieu, D-La., and Rep. Olympia Snowe, R-Maine.
Any differences between House and Senate bills would have to be resolved in a conference among congressional leaders.