Makes Push to Boost Small Business Lending, Provide Tax Credits for Green Jobs and Investments in Rural Colorado
Washington, DC – Michael Bennet, U.S. Senator for Colorado, today continued his push to help Colorado’s small businesses access lending, create new jobs and keep our economy on the road to recovery. Bennet highlighted three priorities that he will push for, including tax credits and increases in SBA loans as the Senate considers the Small Business Jobs and Credit Act this week.
Although small businesses created nearly two-thirds of all new jobs over the past 15 years, a recent U.S. Treasury Department report noted that the 22 banks that received the most Troubled Asset Relief Program (TARP) funds have cut small business lending by $10.5 billion over the past six months.
“Colorado’s small businesses and entrepreneurs are the drivers of our economy, creating new jobs and helping to move our country forward,” Bennet said. “But in this savage economy, small businesses are struggling to stay afloat, let alone hire new workers as lending has come to a halt. We have to get flywheel spinning again so that small businesses have access to the lines of credit they need to grow, create jobs and help our economy recover.”
The Small Business Jobs and Credit Act contains approximately $12 billion in tax relief for small businesses and includes improvements and expansions to SBA lending programs. The bill also calls for the creation of a $30 billion lending facility for community banks to expand lending to small businesses struggling to obtain loans as credit markets have dried up.
Bennet is pushing to include several provisions in the legislation, including: tax credits to incentivize on-the-job clean energy training; tax credits to incentivize investment in rural communities; an increase in the size and scope of SBA loans for small businesses; the creation of an SBA loan clearinghouse to improve access to credit for small businesses; and expediting the patent process for small businesses.
Below is a summary of key items Bennet is pushing for as part of the Small Business Jobs and Credit Act:
1. Creating a Clean Energy Job Training Credit
Bennet’s amendment creates a tax credit for clean energy companies that provide basic education and training to prepare workers for jobs in clean energy. The amendment provides a tax credit of up to 25 percent, and no more than $500 per employee, for qualified education expenses for clean energy job training. The credit is only available to small businesses with no more than 500 employees.
2. Incentivizing Investment in Rural Communities
Bennet’s amendment creates a tax credit for entrepreneurs who invest in rural communities that continue to struggle. The credit would enable rural microentrepreneurs -- sole proprietors with five or fewer employees -- to claim a federal tax credit equal to 35 percent of an investment made in the microentrepreneur’s business. This would offset up to $10,000 in tax liability.
3. Increasing the Size of SBA Loans for Small Business Job Creators
SBA guarantees loans that help small businesses access credit they need for both brick and mortar infrastructure (504) and operating capital (7(a)). Bennet is pushing to raise the limit on 504 loans to $10 million for small businesses that are a significant source of job creation. This could assist franchisees or small manufacturers.
4. Creating an SBA Clearinghouse
Bennet is pushing to create an SBA loan clearinghouse aimed at increasing small businesses’ access to credit. It would create a process enabling a small business’ loan application to be considered by a broader array of lenders. If a business owner applies for an SBA guaranteed loan and is turned town, the bank would have the application turned over to the SBA where it would be reviewed to assess whether the small business meets the SBA’s creditworthiness and eligibility standards. It would then be distributed for other SBA lenders throughout the state and eventually across the country.
5. Expanding the Reach of SBA Guaranteed Loans
Bennet is pushing to enable Small Business Lending Companies (SBLCs) to target lending in low- and moderate-income communities. SBLCs include Community Development Financial Institutions (CDFIs), Community Development Corporations (CDCs), Community Development Entities, SBA 504 CDCs, and Intermediary Microlenders. Bennet’s amendment would authorize a pilot program that creates 12 new mission-driven SBLCs across the country with the goal of spurring lending in low- and moderate-income communities. The new SBLCs must have a record of healthy loan portfolios.
6. Expediting Patents for Small Businesses
Bennet is pushing to add $10 million to the Patent and Trademark Office to expedite patent applications for small businesses, individual inventors and non-profits. This funding would enable the Patent Office to expedite small business applications until Congress completes its work on more long-term reforms. As many as 1.2 million patent applications are stuck at the Patent and Trademark Office. Patents attract capital to small, start up firms. In fact, according to the Department of Commerce, “76% of startup managers report VC investors consider patents when making funding decisions.”