With the Senate on the verge of taking a final vote on the Small Business Jobs Act, President Barack Obama is mounting a full court press to get them to the finish line. Obama will travel to Edison, New Jersey, on Wednesday to talk with small business owners about how the legislation will help them grow and hire more employees.
Black-owned businesses and banks are hoping that the measure’s $30 billion Small Business Lending Fund (SBLF) will provide a much-needed stream of credit that the bigger conventional banks have denied them.
The fund would offer low-interest capital to community banks as well as incentives to increase lending to small business. Banks that fail to increase small business lending within two years will face a interest rate increase.
According to Small Business Administration chief Karen Mills, community banks are three to five times more likely to lend to minority businesses than traditional banks. In a conference call with reporters Tuesday, she said that the fund and other provisions in the bill “will have an enormous impact in communities that are now having trouble getting access and opportunity.”
The bill also calls for a $2 billion State Small Business Credit Initiative that the administration claims will spur $20 billion in private sector lending. In addition, it would renew expired SBA Recovery Act provisions that eliminate fees, and increase loan guarantees and maximum loan sizes for the agencies key lending programs. For additional details, click here.
“The president feels very strongly that we’re at the stage in the economy where we have got to see the private sector coming forth and creating more of the sustainable jobs going forward,” said Gene Sperling, counselor to the Treasury secretary. “Everything in this bill is designed to empower private sector small business owners, so entrepreneurs start creating the new jobs we need to move us forward.”
Obama’s small business provisions aim to:
— Provide small banks on Main Street with capital and incentives to lend to small businesses on Main Street, so that these businesses can renew a credit line, purchase new equipment or open a new location.
— Support state initiatives like loan guarantee programs that make it easier for creditworthy small businesses to borrow from private sector lenders.
— Create tax incentives for new investments made by small businesses seeking to expand and grow – allowing, for example, a small business to more quickly receive a deduction on their taxes after purchasing new machinery or equipment.
— Eliminate capital gains taxes on key investments in small businesses, encouraging and rewarding those who invest their capital in smaller firms.
— Continue successful provisions from the Recovery Act that have helped increase the availability of SBA loans and reduce the fees small businesses pay, while doubling the size of SBA loans small businesses can receive so that they can expand and create new jobs.