President Signs Long-Stalled Small Business Jobs Bill
Leahy: New Law Will Ease Vermont Firms’ Credit Crunch And Offer Tax Relief Incentives For Creating New Jobs
WASHINGTON – President Obama Monday signed into law a small business jobs bill that will boost commercial lending and provide tax relief to small businesses in Vermont and nationwide.
The Small Business Job Creation Act modernizes the application process for U.S. Small Business Administration (SBA) lending programs; targets tax relief to America’s 27 million small businesses; and creates a $30 billion lending fund for healthy Main Street banks to boost capital access to small firms needing an injection of funds to grow their businesses and hire new workers.
Senator Patrick Leahy (D), who has worked with small businesses and lenders statewide on ways to ease the credit crunch, said the fully paid for bill will directly benefit small business job creation in Vermont, where the SBA estimates that a $2.2 million backlog in small business loans now can be promptly relieved. The bill increases the size of SBA guarantees, reduces SBA mandated fees, and lifts the maximum dollar figure of SBA loans. The bill also includes $1.5 billion to bolster state small business lending programs, such as loan participation programs, loan guarantee programs, and collateral support programs, which would provide the Vermont Economic Development Authority (VEDA) with an additional $13.5 million to support lending activities across the state. Senate supporters of the bill, including Leahy and Senator Bernie Sanders (I), had to overcome a months-long filibuster to get the bill through. The legislation is also supported by Rep. Peter Welch (D-Vt.).
Leahy called the reforms “basic, proven, and needed” to accelerate the economic recovery. “In Vermont and across the country employers are still struggling to find the working capital they need to grow their businesses and invest in new jobs,” he said. “This bill will open new commercial lending doors by reducing red tape and expanding loan programs at the SBA, by providing tax relief to businesses that invest in new jobs and equipment, by creating a new $30 billion lending fund specifically for small businesses, and by investing in proven economic development programs like VEDA.”
VEDA CEO Jo Bradley says, “VEDA’s Financial Access Program has been a very successful tool for helping small business. The additional capacity we may be able to access from Treasury would allow us to expand this important program.”
Tight credit has been a problem for many small businesses in Vermont since the economic near-meltdown of 2008. In April Leahy organized a free statewide conference for small businesses in Vermont to learn more about the variety of commercial lending options available through local banks, credit unions, nonprofits, state entities and the federal government.
Over the past two years Congress and the Obama Administration have enacted a wide variety of small business tax relief and tax incentive measures, including allowing firms a bonus depreciation to immediately write off half of the cost of depreciable property; extending the carry-back on net operating losses from two years to five years; and implementing a new payroll deduction for businesses that hire new workers.
Last year’s American Recovery and Reinvestment Act (ARRA) made several changes to the SBA lending process, which are extended by this new bill, which gives SBA an additional $375 million for new loan guarantees. The bill also extends the maximum loan guarantee level, which was raised in ARRA to 90 percent, and continues ARRA’s elimination of processing fees for small businesses. The economic recovery act also created a new type of SBA relief loan for previously profitable businesses seeking temporary and targeted capital. These widespread changes to SBA programs have supported nearly $30 billion in new loans so far.
The economic recovery act also contained $100 million in added resources for the Treasury Department’s Community Development Financial Institution (CDFI) Fund, which brought $6 million in new CDFI funds to Vermont organizations, which are using the money to leverage millions more in private investment for economic development and housing projects across the state.
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Press ContactDavid Carle: 202-224-3693
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