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(Washington D.C.)- The House of Representatives passed legislation today to speed loans to small businesses through community bank lending and state collateral support programs. The Small Business Jobs and Credit Act [H.R. 5297] passed by a vote of 241 to 182.
“I continue to hear from small business owners in Michigan that access to credit is a barrier to job growth,” said Rep. Levin. “The legislation approved today will help small business owners access the capital they need to grow their businesses.”
The Small Business Jobs and Credit Act creates a $30 billion fund that will provide capital to community banks to make loans to small businesses. The fund is expected to result in new lending equal to several times the $30 billion in capital available. In addition, the legislation provides $2 billion in funding for new or existing state lending programs. This proposal, the State Small Business Credit Initiative, was developed in part by Representatives Levin, Peters, and Dingell who introduced similar legislation earlier this year after consulting with the Michigan Economic Development Corporation.
Last year, the Michigan Economic Development Corporation created the Michigan Supplier Diversification Fund to help manufacturing firms access the capital they need to diversify. The MEDC program helped borrowers directly by providing collateral assistance to firms whose equipment or real estate had dropped in value making them unable to qualify for a loan. The program demonstrated the tremendous need for this type of assistance as the fund quickly used up its initial allocation.
“Manufacturers are rapidly adapting to new technology and working to improve their global competitiveness. This funding for state credit programs will directly help borrowers who have been unable to get a loan due to diminished collateral values,” said Rep. Levin.
The Small Business Jobs and Credit Act is a companion of the Small Business Jobs Tax Relief Act [H.R. 5297] which passed by a vote of 247-170 on Monday. The legislation, which was authored by Rep. Levin, provides tax cuts for small businesses to help them grow and create new jobs. The combined legislation is fully offset by closing existing tax loopholes and will not add to the deficit. It must now be considered by the Senate.
For more information on the Small Business Jobs and Credit Act click here: http://www.house.gov/apps/list/press/financialsvcs_dem/presssmbs_05192010.shtml more information on the Small Business Jobs Tax Relief Act click here: http://waysandmeans.house.gov/press/PRArticle.aspx?NewsID=11221
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