Representative Weiner: Pass Small Business Jobs And Credit Act
With Congress returning to session this week, Rep. Anthony Weiner called on the Senate to pass the Small Business Jobs and Credit Act, which would provide tax incentives and leverage billions of dollars in loans to spur investment in small businesses and help create new jobs. The bill passed the House in June, despite 97 percent of Republicans voting no.
The Small Business Jobs and Credit Act is designed to boost lending to small businesses, which have struggled to gain access to credit due to the financial crisis. According to a Weiner spokesperson, in 2009, 45 percent of small businesses seeking loans were unable to get their credit needs met, and the problem is getting worse. In May 2010, the a National Federation of Independent Businesses survey found that a net 14 percent of business owners reported loans harder to get than in their last attempt, down one point from March.
The bill now before the Senate will create a new $30 billion lending fund for small and medium-sized community banks to leverage up to $300 billion in lending. The CBO estimates that this lending fund will actually save taxpayers $1 billion over 10 years, as banks are expected to pay back these funds with interest.
According to Weiner, this bill would also create a $2 billion State Small Business Credit Initiative Program, which means New York City small businesses would have access to extra capital through the City’s Economic Development Corporation (NYSEDC). Under the terms of the bill, the NYSEDC would incentivize loans by providing matching payments to qualifying banks that extend new loans to small businesses.
Additionally, this bill includes numerous tax-cutting measures amounting to $12 billion in relief for small business. Among the tax breaks are increased deductions for start-up expenditures, exclusion from small business capital gains, penalty relief, and exclusion from taxes against money borrowed under the Small Business Administration’s assistance program. If passed the bill would also allow selfemployed taxpayers who purchase health insurance coverage for themselves and immediate family members to exclude the cost of the insurance from the income base used to calculate the self-employment tax for 2010.
“Now, more than ever, we need legislation that will help small businesses get back on their feet and put Americans to work,” Weiner said. “Unfortunately, for too long the Senate has served as little more than a graveyard for critically important legislation. As Congress returns to session, Senate Democrats’ top priority must be to pass this assistance for America’s small businesses.”
Key Measures of The Small Business Jobs and Credit Act
Would create a new $30 billion lending fund for small and medium-sized community banks to leverage up to $300 billion in lending.
Contains incentives to promote greater small business lending by banks, including an interest rate cut of 1 percent on the loan’s principal for every 2.5 percent increase in small business lending the banks show compared to 2009.
CBO estimates that this provision would actually save taxpayers $1 billion over 10 years, as banks are expected to pay back these funds over 10 years with interest.
Would create the State Small Business Credit Initiative Program, which would give small businesses access to extra capital through City’s Economic Development Corporation.
Provides numerous tax cutting measures, amounting to $12 billion in relief for small business.