Happy Birthday Small Business Jobs Act

From the U.S. Senate Office of Mary Landrieu

27   Sep. 13   Small Business Jobs Act Turns Three Dear Small Business Advocate, Three years ago today, the Small Business Jobs Act became law.  As Chair of the Senate Small Business and Entrepreneurship Committee, I am proud to have led this bipartisan effort to help America’s small business recover from The Great Recession.   The Small Business Jobs Act added billions of dollars of lending and investment to America’s entrepreneurs and provided $12 billion in tax relief to small businesses from coast to coast.                  (Press Conference in support of the Small Business Jobs Act, Sept. 2010)                                                 -Watch video- When I took over as Chair of this Committee in January 2009, our country was facing the worst economic recession since the Great Depression.  The U.S. economy lost 818,000 jobs that month alone.  From September 2008 through the end of 2009, the Great Recession wiped out 7 million American jobs.   In the face of tightening credit markets and insufficient resources to assist them, small businesses were struggling to keep their doors open; and the primary agency responsible for assisting them was itself struggling to keep up with demand after suffering significant budget cuts in the previous years.   The Small Business Jobs Act got small businesses in Louisiana, and across the nation, the help they need, ensuring they maintained their historic role as job creators and innovators spurring economic recovery.   Since the passage of the Small Business Jobs Act: --The Small Business Administration (SBA) supported approximately $60 billion in lending over the past two years, which were the two highest SBA lending years on record. --SBA has refinanced 2,424 small business commercial mortgages, totaling almost $2.3 billion in volume through the 504 commercial mortgage refinance program.  This helped contribute to the highest 504 lending year of all time which supported over $15 billion in small business lending. ---SBA successfully rolled out the first round of State Trade and Export Promotion (STEP) grants in September 2011 to 47 states and four territories, totaling $30 million.  STEP grants maximize the federal-state-local resources to help small businesses export so they can grow their business and create jobs.  The STEP program assisted more than 2,000 small businesses begin exporting or increase their current export success. Sincerely, Mary Laundrieu Please contact Sen. Landrieu at the office nearest you.

www.landrieu.senate.gov

Small businesses still need loans

The South Carolina Small Business Chamber was a strong and vocal supporter of last year’s Small Business Jobs Act. I spoke at a press conference at the Capital along with several U.S. Senators to state our support and that of the American Sustainable Business Council for the legislation.

A key component of the effort was the establishment of a $30 billion lending fund to encourage community banks to make small business loans. Of course, just like Small Business Administration (SBA) loans, this program can only make issuing the loans more attractive. The SBA does this through federal guarantees and the lending fund does it through low interest rates.

The success of this new program is totally in the hands of the private lenders. Financial institutions cannot be forced to make the loans.

Today was the deadline for community banks to request to participate in the new lending fund. The Wall Street Journal reports that only 7% of the nation’s 7,700 community banks eligible for the loan program (because they have less than $10 billion in assets) have indicated that they want to participate. The Treasury Department has now extended the deadline to May 16th.

The reason given by some banks is that there is little loan demand from small businesses. That’s simply not true. The demand is there. I hear all the time that a small business owner, even with assets, can’t get a loan.

The truth is this. All financial institutions (with the encouragement of federal regulators) have raised the bar for qualified borrowers. Many of them are sitting on large vaults of money but are afraid to make small business loans that are now perceived as risky.

One solution to this dilemma is allowing the SBA to bypass the financial institutions and start making loans directly to small businesses. We’re now doing this with Stafford and other student loans from the federal government that use to go through private lenders. And I understand that the SBA actually does make business loans on its own in some cases.

The SBA direct small business loans idea has been discussed before but always quickly shot down. But if all the government incentives in the world won’t get the financial institutions to start lending to small businesses, then maybe it’s time to jump start the free market and our economy by putting Uncle Sam in the game.

10 down and 2 to go

2010 has been a very successful year for The South Carolina Small Business Chamber of Commerce and there are still 2 months remaining before 2011.

Below is a very brief overview of wins this year and also some historical victories.

Success in 2010

-Passage of national health care reform resulting in no mandate or tax on small businesses. 53,000 SC small businesses being eligible for health insurance tax credit this year. Insurance exchanges in 2014 to allow small businesses to leverage collective clout to drive down premiums and elimination of premium increases due to worker with pre-existing condition.

-Passage of the state cigarette tax increase with funds going to meet health care needs of Medicaid recipients (133% of poverty and below starting in 2014).

-Passage of  national Wall Street Reform to reign in the excessive risky behavior of the financial industry that created the recession and create an agency for consumer, including small business, protection.

-Passage of the national Small Business Jobs Act which included a $30 billion lending fund to enable community banks to start making small business loans again and increase SBA lending ability.

-Successfully intervened in an SCE&G electric rate hike request of 9.52% to have it reduced to 4.88% over three years, a savings of over $96 million to customers.

-Successfully intervened in SCE&G’s proposed Demand Side Management program to enable small businesses more opportunity (inclusion in an energy information display pilot) to take conservation actions to reduce cost.

-Launched a “BuySC” (BuySC.org) program to encourage the public to purchase more goods and services from locally-owned South Carolina small businesses and establishing a free on-line directory of these businesses for customers to use.

Some of the past SCSBCC Successes

-Reducing the income tax on small business from 7 to 5 percent saving small business owners $129 million each year.

-Regulation of workers' compensation rates to reduce premiums.

-Job tax credits for the first time for small businesses.

-$1000 tax credit for new Registered Apprentices.

-Opposing SCE&G electricity and gas increases at the S.C. Public Service Commission resulting in savings to residential and business customers of over $172 million from 2003 to 2010.

-Opposing workers' compensation proposed rate increases in the Administrative Law Court resulting in saving state businesses over $185 million on premiums since 2006.