Business Bill Reaches Obama’s Desk

The $42 billion Small Business Jobs Act was passed by the Senate a week ago and received House approval last Thursday.  It is now on its way to President Obama’s desk for signature.  It is anticipated that he will give his approval quickly to this bill that he has been recommending to Congress all summer.

The bill will authorize the Treasury Department to create a $30 billion fund to give banks the capital at an extremely attractive rate to lend to small businesses by making the loan funds available to community banks.  The object is to help local businesses rather than the business giants that have been primarily helped by other phases of the recession bailout.

Also included in the bill is a $1.5 billion fund for grants to state lending programs that also provide loans to small business.  The state programs have largely been effective in helping small business, but most of these funds have run dry because of state budget cuts and problems with balancing budgets.

The third element of the Small Business Jobs Act is a number of tax credits that will cost $12 billion over a 10 year period.  The tax breaks will encourage small businesses to invest in new equipment, help venture capital companies to make investments in small business, and offer incentives to start-up companies.

The last element of the bill are improved loan guarantees for lenders who make loans to small business, and improved guarantees from the Small Business Administration to help loosen credit to small business.

Lack of credit for small business is certainly one of the elements that are hurting the economy; although Republicans point out that the bill does nothing to resolve the uncertainties that are stopping business from investing in jobs and growth.