Resident commissioner co-sponsors bill to expand capital access for small business
- The San Juan Daily Star
- 4 hours ago
- 2 min read
By THE STAR STAFF
Resident Commissioner Pablo José Hernández Rivera has joined as a co‑sponsor of House Resolution (HR) 7229, the Territorial SBA Loan Guaranty Adjustment Act, a bipartisan measure aimed at expanding access to capital for small businesses operating in U.S. territories. The bill, introduced on Jan. 22, seeks to address longstanding disparities in financing that have hindered economic growth across areas such as Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa, and the Northern Mariana Islands.
“Small businesses are the economic engine of Puerto Rico, but they often face barriers to securing fair financing,” Hernández Rivera said in a statement. “This bill recognizes those inequalities and draws a direct line between federal policy and economic development in the territories.”
Puerto Rico and the other territories have long struggled with structural challenges -- including fragile infrastructure, limited banking competition, and repeated disruptions caused by natural disasters and economic shocks. By strengthening federal loan guarantees, supporters argue, the measure could spur new private lending, drive the expansion of local enterprises and support job creation.
HR 7229 amends Section 7(a) of the Small Business Act to raise the federal loan guarantee rate to 90% for SBA‑backed loans made to “covered territory businesses.” This significant increase means the federal government would shoulder a larger share of the risk, making lenders more willing to issue loans in regions where economic uncertainty often depresses credit availability.
However, the 90 percent guarantee would not apply to all SBA loans. The bill explicitly excludes certain categories, including those issued under paragraphs (9), (14)(A), (16), (31), or (34) of the Small Business Act, as well as loans under designated SBA pilot programs.
The measure also includes a technical conforming amendment to ensure that the new guarantee structure is properly incorporated into the existing statute.
HR 7229 was introduced by Rep. James C. Moylan (R-Guam), with Rep. Kimberlyn King-Hinds (R-Northern Mariana Islands) as the initial co‑sponsor. Hernández Rivera’s support adds further territorial alignment behind the proposal. The bill is currently before the House Committee on Small Business.
According to legislative trackers, the bill is still in its introductory phase and has not yet received a committee vote.
Hernández Rivera emphasized that the measure could play a critical role in unlocking long‑restricted capital flows on the island. Puerto Rico’s small businesses -- which make up the overwhelming majority of the island’s employer base -- often face higher loan costs, stricter collateral requirements, and limited lending competition compared with their mainland counterparts. Enhanced federal guarantees could ease those barriers while encouraging private-sector investment in key growth areas.
If enacted, the proposal would mark one of the most significant federal adjustments to territorial small‑business financing in recent years, supporters say. For many local entrepreneurs, it could mean the difference between stagnation and expansion.