The House of Representatives today passed the "Small Business Year 2000 Readiness Act," which will authorize the Small Business Administration (SBA) to expand its guaranteed loan program to provide businesses with the means to continue operating after January 1, 2000. It will also make lenders and small firms more aware of the "dangers that still lie ahead," according to the bill.
Passed by the Senate earlier this month, the bill will help small businesses finance repairs of computer hardware and software systems that are unable to handle the Year 2000 technology problem, backers of the bill claim.
"The House recognized that small businesses face serious challenges with Y2K and anything we can do to help we should do," said T. Rowe, council for the House Committee on Small Business.
The Year 2000 bug could cripple software that cannot accommodate a four-digit entry for the current year. Thus when 2000 begins, many programs will register only the "00" and read the date as 1900.
As reported earlier, the proposed bill requires the SBA to establish a limited-term loan program whereby the agency guarantees the principal amount of a loan made by a private lender to assist small businesses in correcting Y2K problems.
To assist small businesses that may have difficulty maintaining cash flows while correcting their Y2K glitches, the bill will also allow limited deferments on principal payments, longer maturity terms, and expanded options for refinancing.
The outlook for small business is not good. Congress estimates that 750,000 small businesses are at risk of temporary shutdown or significant financial loss, and that Y2K could affect as many as 4.75 million small businesses nationwide.
Citing a recent survey sponsored by the National Federation of Independent Business, bill supporters note that 40 percent of small businesses say they do not plan on taking action on the Y2K problem or do not believe it is serious enough to worry about.
With passage in the House, all the bill needs now to become law is the signature of the President.