Entrepreneur Bill - SuffolkJournal.com

Congressmen Team Up
For Entrepreneur Bill
by James B. Teese

April 16, 2002

With lenders and high-tech sector leaders in attendance, Reps. Felix Grucci and Steve Israel joined Long Island Association (LIA) President Matthew Crosson at the LIA headquarters in Commack on April 4 to announce new legislation to encourage high-tech entrepreneurship on Long Island.

The bill, developed in consultation with the LIA, would provide start-up loans for small high-tech businesses, specifically by restructuring and expanding the so-called "7-A" program of the Small Business Administration (SBA).

"I am pleased that my colleague and partner, Rep. Felix Grucci, is sponsoring this bill with me, along with Rep. Mike Honda of California," declared Israel. "Our bill would create a pilot project on Long Island and in California to incubate high-tech businesses."

"There are great institutions in my district founded upon innovative and creative technological ideas, such as Computer Associates, Symbol Technologies, and Arrow Electronics," noted Grucci. "This bill is designed to help such ideas come to reality."

Israel agreed, noting that the bill "would unharness and unleash the
entrepreneurial spirit...by cutting through bureaucratic and financial
barriers and making it easier for high-tech companies to access new sources of capital."

Grucci and Israel introduced the bill jointly, working with the LIA, especially with the LIA's High Tech Financing Committee, according to Mitchell Pally, the LIA's vice president of government affairs. "This bill will directly assist companies "who are now having difficulty in receiving SBA loans because of current regulations," said Pally.

The legislation, (HR 3791) would establish a pilot program to expand the Small Business Administration's (SBA) 7-A program on Long Island and in Silicon Valley, two strong high tech regions.

The current 7A program only guarantees loans up to one million dollars, it does not make loans. This bill would authorize the SBA to make a combination of direct loans and loan guarantees of up to $5 million.

The pilot program requires that a not-for-profit regional development organization, such as the LIA, partner with the SBA in evaluating loan applications. The two-part evaluation process would include an assessment of the scientific and technological merit of the business by a panel of local, independent scientists and researchers, as well as an assessment of the financial risk by a group of local lenders.

"This legislation builds partnerships between science, financial institutions, economic development groups, and the federal government to propel a new 21st century economy," said Israel.

The economic impact could be measured by many millions of dollars according to Crosson. "The mainstream lenders have money and are eager to lend in the technology sector," said Crosson. Given the opportunity this program would represent, "the money is there," he added.

Other attendees included Jim Finkle, Manager, LI High Tech Incubator at Stony Brook, Joseph Scaduto, Executive Director, LI Life Sciences Initiative, Judith McEvoy, Executive Director, Small Business Development Center at Stony Brook, as well Glen Albert of JP Morgan Chase and Jeffrey Brogan, PhD of Poly Therm Corporation, who added their praise for the benefits of the legislation.

Grucci and Israel are now focused on recruiting co-sponsors from among their House colleagues and to gaining support from New York's Senators, Chuck Schumer or Hillary Clinton, regarding a sponsor for a Senate version of the bill.