MARKEY MEASURE INCLUDED IN SMALL BUSINESS JOBS BILL ENACTED TODAY
New law will help businesses access capital and tap frozen equity
Washington,
Sep 27 -
The final version of the Small Business Jobs and Lending Act signed into law today by the President contains a key measure introduced by Congresswoman Betsy Markey.
Introduced by Rep. Markey in May of 2009, the Small Business Assistance in Debt (AID) Act permits small business owners to access capital and tap into equity locked in their commercial real estate due to the financial and banking crisis.
Rep. Markey worked with Sens. Olympia Snowe (R-ME) and Mary Landrieu (D-LA) to include the measure in the new small business jobs law, which will now allow qualified small businesses to temporarily use the Small Business Administration’s 504 Loan Program to refinance their existing conventional loans.
“This is terrific news for Colorado small businesses that have been hamstrung by this recession,” said Rep. Markey. “Due to changes in the banking industry’s ability and willingness to lend, small businesses are being squeezed out of capital markets. Banks, like most Americans, have been forced to tighten their belts, and banks have had to limit access to capital. This provision will let small businesses do what they do best: pull themselves up without a handout or bailout. They will be able to refinance their current debt so that they can invest in new facilities, equipment, or hire additional workers.”
The Small Business AID provision of the Small Business Jobs and Lending Act will:
- Facilitate access to capital by small businesses owners who have equity locked up in their commercial real estate that they are unable to access because banks are unwilling or unable to refinance in the existing environment;
- Under the SBA 504 program, the bank holds 50 percent of the note, the Certified Development Company with which the bank and the borrower partner takes a 40 percent stake, and the borrower puts down 10 percent.
- By reducing the banks’ stake in the original loan, the measure will simultaneously provide a much-needed infusion of cash into the banking sector.
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