By U.S. Rep. Mike Michaud(D-Maine)
Nationally, small businesses create 60 to 80 percent of new jobs every year. Unfortunately, the current economic crisis has frozen credit and made it more difficult for American small businesses to get the financing they need. The President recently challenged Congress to provide additional resources to small businesses in order to help them grow and spur much-needed job growth. I am pleased to report that we are halfway there.
On October 29th, the House of Representatives passed a bill advanced by my colleagues and I on the House Small Business Committee that would comprehensively reform the Small Business Administration’s (SBA) lending programs. Improving and expanding SBA’s programs will make them even more accessible and flexible for Mainers looking to use them. And that’s a good thing given the heavy usage of SBA loans in Maine – in fiscal year 2009, 513 SBA loans were made in Maine, totaling just over $74.8 million that went to help our state’s small businesses.
In line with the President’s challenge, the bill raises SBA loan amounts to help small firms access larger amounts of capital. To increase loan availability, the bill expands SBA support to facilitate small business lending, makes micro loans more affordable for budding entrepreneurs, and takes steps to encourage smaller lenders to help rural businesses and veteran-owned businesses obtain affordable credit.
The bill also extends key Recovery Act provisions that eliminated fees on SBA loans, making them more affordable for small businesses. The bill keeps in place a 90 percent federal guarantee on certain loans, giving local banks and credit unions the confidence they need to lend to small businesses.
One complaint I often hear is that the SBA’s application process is cumbersome and lengthy. I am pleased that the bill we passed streamlines the application processes, making it easier for small businesses to access the loans and investments they need.
To help small business start-ups, the bill supports a public/private partnership aimed at channeling investment capital to emerging companies. It also increases loans to help firms in the manufacturing sector and directs investment money to hard hit communities so that businesses can create jobs where they are needed the most.
Each year, the bill is expected to support $44 billion in small business lending, helping to save or create 1.3 million jobs annually.
Small businesses are the backbone of Maine’s economy and they are the key to our economic recovery. The recession and credit crunch have hurt their access to capital and they can’t afford prolonged inaction in Washington. This bill would give them additional resources when they need it most. I urge the Senate to join the House in passing a strong bill that we can get to the President’s desk as soon as possible.
