Washington, DC – Yesterday, U.S. Reps. Ed Perlmutter, Mike Coffman and Scott Tipton introduced a bill to help small businesses get access to the capital they need.

The Capital Access for Main Street (CAMS) Act will temporarily allow small community banks with under $10 billion in assets to spread out or amortize a portion of their commercial real estate loans over a seven-year period.  As a result, these small community banks, which provide many of the loans to our small businesses, will have more liquid capital available to make responsible loans.

Small businesses generate over 50% of our nation’s annual GDP. They are responsible for nearly two-thirds of all new jobs, and they need access to credit to stock inventory, hire workers and weather the storm so they can innovate and grow and drive our economy forward.  But, they are at a log jam with small banks, who can’t and aren’t extending the credit they need.

“Small businesses are the economic engine of our economy,” said Perlmutter.  “Their innovation and ingenuity will help our country continue to diversify, grow and prosper. Small business owners and small banks are not looking for a bailout or a free deal.  They are asking for a fair deal, to be able to compete and work out their difficulties over time. This plan is the responsible way to help small businesses weather the storm, set the foundation to rebuild our communities, and create the jobs we need to work our way back to prosperity."

“This legislation is desperately needed to help small businesses get financing.  Small businesses are the engine that drives economic growth and job creation but without access to capital that just won’t happen,” Coffman said.

“Small businesses are the backbone of our economy.  They account for most of our nation’s new jobs, employ half of the country’s private sector workforce, and provide for half of the nonfarm, private real GDP in the U.S.,” Tipton said. “Our CAMS bill will free up much needed capital so that community banks will be able to make responsible loans to small businesses so that they can expand, creating badly needed jobs.”

The TARP Congressional Oversight Panel estimated banks hold approximately $1.4 trillion in commercial real estate debt coming due over the next three years.   The current rules require banks to write down all of this debt all at once, which reduces the bank’s available capital and impairs its ability to lend to small businesses.

CAMS would allow community banks under $10 billion in assets to temporarily amortize losses over 7 years on commercial real estate and other qualified real estate related transactions.

The CAMS bill allows critical capital levels and careful regulation to be maintained and for credit to be granted to qualified borrowers.  It provides some time for a bank to manage problem loans versus the current practice of harsh, immediate write-downs that will sink many banks and the businesses depending on them when both can be saved.

Amortization was used during the 1980s to deal with the significant strain banks experienced from the agriculture industry and helped the participating banks weather the storm.  This bill will help small businesses, which account for approximately 70% of all new jobs created.

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