Last week, the Senate Committee on Small Business and Entrepreneurship held another of those peculiar hybrid hearings covering more than one topic, aptly named “Progress Report on Recovery Act Implementation and Alternative Sources of Financing.” So, after SBA Administrator Karen Mills (a panel unto herself) testified about the SBA’s progress on implementing the various provisions of the American Recovery and Reinvestment Act (ARRA) , a second panel offered insight into various alternative forms of financing available to small businesses. Mills was able to let Members know that weekly loan volume is up significantly (28% for 7(a) loans) and that she is exploring ways and means to get small firms in on ARRA state and federal contracts.

The second panel was composed of representatives from segments of the small business finance universe that normally get a lot of lip service but not necessarily much air time: representatives for credit cards, microenterprise development organizations, community banks and Community Development Financial Institutions, and private equity investors. The bulk of the question and answer period for that second panel was spent exploring the ways in which the current economic climate is challenging non-profit microlenders and CDFIs, and what the government could do to support them. To all of which Chairwoman Landrieu listened so attentively that one could conclude that she is receptive to the idea that the government should support alternatives to the 7(a) and 504 loan programs. That is a relief, because every survey available on the subject has found that current federal capital access programs are not meeting the needs of microbusinesses.