Small businesses are the engine of our economy, creating two-thirds of the new jobs over the last 15 years. Small businesses continue to face a lack of credit and tight lending standards, with 45% of small businesses seeking loans unable to get their credit needs met in 2009 and lenders reporting three years of tightening loan standards for small firms through this winter.
As Speaker Pelosi has said, our economic “recovery depends on small business owners and entrepreneurs — the men and women who take risks, embrace opportunity, hire workers and pay them a decent wage, and reach for their piece of the American dream.” Democrats in Congress continue working to offer small businesses the tools and resources to endure our current economy and thrive in the future, placing a down payment on our long-term economic growth. To create hundreds of thousands of jobs on Main Street, the House passed two bills this week to expand much needed lending to small businesses and offer tax incentives to help small businesses grow, hire, and fuel our economy–which are fully paid for and comply with pay-as-you-go budget law.
Leverage up to $300 billion in loans for small businesses through a $30 billion lending fund for small and medium-sized community banks, which focus on lending to small firms, and $2 billion for innovative state lending programs supporting small business. A few public dollars can generate substantial private bank financing; net cost of this lending is $1 billion over 10 years. The lending fund is separate from and unlike TARP it is fully paid for and will save taxpayers $1 billion as banks are expected to repay funds over 10 years; it is limited to smaller banks; and tough performance-based incentives would ensure that banks lend to small businesses.
Restart private investment to meet small businesses' evolving financing needs through a new SBA public-private partnership.
Provide $3.5 billion in tax incentives to spur investment in small businesses and the formation of new small businesses, and grant small business tax penalty relief.
Yesterday, Speaker Pelosi, Leader Hoyer, Rep. Peters (D-MI), and Rep. Schrader (D-OR) were joined by small business owners for a press conference in the Capitol to discuss the impact of the Small Business Jobs and Credit and Tax Relief Acts:
Speaker Pelosi on passage:
America’s small business owners are the backbone of our economy. With this legislation, we are helping to ensure they have what they need to be the engine of our recovery.
Democrats in Congress have heard the calls from small businesses to help provide them with the tools they need to grow: access to capital and tax relief. The legislation passed by the House this week will unleash up to $300 billion in loans for small businesses; they also offer $3.5 billion in tax incentives and tax relief to small businesses.
These bills will create and save jobs, and are fully paid for by closing tax loopholes. They build on the accomplishments of this Congress for small businesses, including the Recovery Act, health insurance reform, and a net operating loss provision and accelerated tax write-offs.
Democrats will continue to work on behalf of America's Main Street, and the small businesses that will ensure our nation's economic success, while Republicans continue to stand for the interests of Wall Street and Big Banks.
The legislation passed this week adds to other bills the Democratic-led House has passed this Congress to help small businesses and strengthen our economy:
Small Business and Infrastructure Jobs Tax Act (Passed House 3/24/10):
Allows a 100% exclusion from gross income of gain from the sale of qualified small business stock acquired after March 15, 2010, and before January 1, 2012.
Increases the tax deduction for business start-up expenditures in 2010 and 2011.
These provisions have been incorporated into the Small Business Jobs Tax Relief Act.
Disaster Relief and Summer Jobs Act (Passed House 3/24/10)
Extends the Recovery Act small business lending program, which has already helped save or create over 560,000 jobs.
Affordable Care Act (Signed into law 3/23/10):
Offers immediate and long term tax credits to small businesses to make employee coverage more affordable.
Creates a Health Insurance Exchange where small business employees will have group purchasing power.
Hiring Incentives to Restore Employment (HIRE) Act (Signed into law 3/18/10):
Exempts employers from paying the employer share of Social Security employment taxes for wages paid in 2010 for any new employee that was previously unemployed and does not replace another employee.
Provides employers a $1,000 income tax credit for every new employee they employ for 52 weeks.
Extends through 2010 the Recovery Act provision that would allow small businesses to write-off capital expenditures up to $250,000.
FY 2010 Appropriations (Signed into law 12/16/09)
Includes increased funding to revitalize the SBA after eight years of Bush-era budget cuts, so that it may better protect the interests of small businesses.
Provides $28 billion in new SBA lending.
Worker, Homeownership & Business Assistance Act (signed into law 11/06/09):
Extends the Recovery Act small business provision allowing small businesses to use the extended carryback period for a net operating loss incurred in 2008 or 2009.
Small Business Financing and Investment Act (Passed House 10/29/09):
Helps small businesses find affordable financing by updating and improving the SBA's capital access programs.
Job Creation Through Entrepreneurship Act (Passed House 5/20/09):
For the first time in ten years, strengthens the SBA's Entrepreneurial Development programs, which are responsible for:
Providing technical and managerial training to small businesses.
Yielding strong returns in terms of economic growth: In 2008, these programs helped generate 73,000 new jobs and infused $7.2 billion into the economy.
American Recovery and Reinvestment Act (Signed into law 2/17/09):
Allows small businesses to extend the carryback period for up to five years for net operating losses incurred in 2008.
Enables small businesses to expense up to $250,000 for capital expenditures in 2009.
Provides work opportunity tax credits to employers who hire unemployed veterans and disconnected youth.