On Oct. 21, 2009, President Obama announced that he will ask Congress to increase limits on government loans to small businesses. His proposals closely track legislation (S.B. 1615) introduced in August by Sen. Olympia Snowe (R-ME), the Ranking Member on the Senate Small Business and Entrepreneurship Committee and a key player in the health care reform debate. The President also announced that he plans to reduce the interest rate on loans made to small businesses under the Treasury Department’s Troubled Assets Relief Program (TARP).

Sen. Snowe and Sen. Mary Landrieu (D-LA), the Small Business and Entrepreneurship Committee Chair, applauded the President’s announcement. Sen. Landrieu responded by saying that she will introduce legislation in late October that would closely track S.B. 1615 and include additional enhancement to programs operated by the Small Business Administration (SBA).

The planned legislation would increase the maximum loan in the SBA’s standard 7(a) loan program and the 504 loan program (which finances long-term small-business investments in real estate and fixed assets such as equipment) from $2 million to $5 million. The limits on short-term SBA “microloans” would be increased from $35,000 to $50,000.

Additionally, the plan would increase the amount of money that can be invested in a company under the New Markets Venture Capital program, which provides investment capital to small businesses in low-income areas. It also would make technical changes to improve access to America’s Recovery Capital (ARC) program, a program created in the economic stimulus bill that provides interest-free loans of up to $35,000 to pay down existing debt on 7(a) loans.

Meanwhile, during the week of October 26–30, the House of Representatives will consider legislation (H.B. 3854) introduced on Oct. 20 by Rep. Kurt Schrader (D-OR-5), Chairman of the House Small Business Subcommittee on Finance and Taxes. H.B. 3854 combines provisions from eight bills aimed at improving small businesses’ access to capital. The legislation would allow the SBA to increase loans, provide more capital to low-income areas and renewable-energy industries, and make loan guarantees to small health care firms purchasing health information technology (HIT).

The HIT provisions authorize the SBA to guarantee up to 90 percent of loans made to health care providers to support the acquisition and installation of certified HIT equipment, if the providers qualify as a small business and are classified as an “eligible professional” under the HIT provisions in the economic stimulus bill. Loans are capped at $350,000 for individual practitioners and $2 million for group practices. The legislation prohibits most fees associated with such loans and permits a deferral period of one to three years.

Impact on General Dentists: Collectively, the provisions in the bills sponsored by Sen. Landrieu and Rep. Schrader will make more capital available to small business owners, including general dentists. The HIT provisions in the Schrader bill are particularly exciting in that they would provide small business health care practitioners with access to a funding source that would allow them to “wire” their offices and thus qualify for HIT bonus payments.