Congressman Evans' Advances Small Business Priorities

July 25, 2018
Press Release

H.R. 6347, authored by Congressman Dwight  Evans (Philadelphia and Montgomery County), cleared the House Small Business Committee last week, taking an important step toward final passage and enactment.  If enacted, the measure would reduce burdens on lenders and small business borrowers participating in Small Business Administration’s (SBA) 7(a) program.  Under current rules, for loans over $250,000 secured by commercial real property, the lender or SBA must obtain an appraisal of the property being used as collateral.  Evans’ bill would update these standards to raise the threshold to $500,000 to be in line with appraisal thresholds established by federal regulators.  By reducing the number of loans that require an appraisal, the bill would help channel capital to small companies more quickly. 

“The appraisal standard is out of date and this is constricting the flow of capital to small companies,” noted Rep. Nydia Velázquez (D-NY), the ranking Democrat on the Committee.  “I applaud Mr. Evans for putting forth this change, which will mean more businesses can secure financing to grow their operations and invest in their communities.”

“I am pleased to introduce H.R. 6347 which lowers the cost of doing business by requiring fewer mandatory appraisals,” said Congressman Evans. “With the enactment of this important piece of legislation, appraisal costs passed on to borrowers will be greatly reduced since formal appraisals will only be mandatory on loans over $500,000, or above any threshold established by the regulators in the future.   Updating the Small Business Act statutory appraisal threshold is important to both SBA lending partners and small business borrowers. The City of Philadelphia has a robust real estate industry which employs appraisers, lenders, construction workers, bankers, and numerous others.  This industry is responsible for critical job creation.  And I look forward to working with my colleagues on this Committee as we continue to look for more tools in the toolbox to ensure that America’s small businesses can continue to grow, prosper, and most importantly, hire.”

Additional Democratic bills that passed this week aim to expand small firms’ involvement in the federal marketplace.  H.R. 6367, the Incentivizing Fairness in Subcontracting Act, authored by Rep. Al Lawson (D-FL) passed the Committee.  It would allow federal agencies in certain instances to count dollars spent by prime contractors on subcontractors toward agencies’ statutory small business contracting goals. The bill further includes provisions to ensure prompt payment to subcontractors when work is completed. 

A third Democratic introduced by Rep. Alma Adams (D-NC) measure passed by the Committee addresses the growing use of “category management,” a federal contracting practice which many critics say increasingly locks small businesses out of the contracting process.  Committee hearings have previously found that category management, while billed as lowering costs for contracting agencies, actually does the opposite. Moreover, the model often results in further exclusion of small businesses from the federal marketplace. 

A final Democratic bill approved in Committee this week will help foster entrepreneurship and technological partnership between small businesses and the federal government.  H.R. 6368, the Encouraging Small Business Innovators Act, written by Rep. Adriano Espaillat (D-NY) makes changes to the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) initiatives. Among other steps, the bill will allow experienced firms in the SBIR/STTR programs to mentor younger companies, encouraging more firms to be involved. 

All of the Democratic bills passed the Committee with strong bipartisan support.  They will now need to be considered by the full U.S. House of Representatives.