BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 201|
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CONSENT
Bill No: AB 201
Author: Holden (D)
Amended: 4/30/13 in Assembly
Vote: 21
SENATE GOVERNMENTAL ORGANIZATION COMMITTEE : 11-0, 6/11/13
AYES: Wright, Nielsen, Berryhill, Calderon, Cannella, Correa,
De Le�n, Galgiani, Hernandez, Lieu, Padilla
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 74-0, 5/23/13 (Consent) - See last page for
vote
SUBJECT : Small business financial development corporations
SOURCE : Author
DIGEST : This bill requires the Director of the Small Business
Loan Guarantee Program (SBLGP) to maintain an Internet Web site
that has information on the programs administered through the
statewide network of small business financial development
corporations.
ANALYSIS :
Existing law:
1. Authorizes the formation of small business financial
development corporations to grant loans from, or guarantee
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loans made by a financial institution or financial company
against, moneys awarded to the corporation from a specified
fund for the purpose of stimulating small business
development.
2. Authorizes or requires the designated Director to perform
specified duties to operate the SBLGP.
This bill requires the Director of the SBLGP to maintain an
Internet Web site that has information on the programs
administered through the statewide network of small business
financial development corporations. In addition, this bill:
1. Specifies that programs covered shall include loan
guarantees, direct lending, surety bond guarantees, and
disaster loans.
2. Requires the information to be presented on the Web site in a
manner appropriate to address the needs of both small
businesses and existing and potential financial institutions
and financial companies.
Background
The SBLGP enables a small business to obtain a term loan or line
of credit when it cannot otherwise qualify for a loan on its
own. The state, working through 11 financial development
corporations, offers direct loans or loan guarantees to
qualifying small business borrowers.
Applicants must meet the definition of a small business (100 or
fewer employees), and the specific market rate loan terms and
interest rates are negotiated between the borrower and the
lender. Proceeds of the loan must be used primarily in
California for any standard business purpose applicable to the
applicant's business. The SBLGP provides guarantees covering up
to 90% of the loan, but not exceeding $500,000. The SBLGP helps
a business to obtain a loan and establish credit with lenders,
so that the business may be more likely to obtain additional
future financing on its own.
Comments
According to the author's office, the SBLGP has been
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instrumental in working with banks to guarantee loans to
undercapitalized small businesses. The author's office states
that, at a time when California is striving to rebound from a
long recession, the SBLGP can play a pivotal role in making
capital more accessible to thousands of small businesses so they
can expand, create new jobs, and protect the jobs of existing
employees.
The author's office notes under the Small Business Act, the
Obama Administration has allotted $78 million to the SBLGP, and
the state has appropriated another $38 million. The author's
office states that this bill ensures that information about the
SBLGP, including a list of participating lenders, is posted on
the GO-Biz (Governor's Office of Business and Economic
Development) Web site for small businesses to explore this
resource.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
ASSEMBLY FLOOR : 74-0, 5/23/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Ch�vez, Chesbro, Conway,
Cooley, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell,
Gray, Hagman, Hall, Harkey, Roger Hern�ndez, Jones-Sawyer,
Levine, Linder, Logue, Lowenthal, Maienschein, Mansoor,
Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi,
Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel
P�rez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone,
Ting, Wagner, Weber, Wieckowski, Wilk, Williams, Yamada, John
A. P�rez
NO VOTE RECORDED: Grove, Holden, Jones, Waldron, Vacancy,
Vacancy
MW:d 6/25/13 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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