Introduces Amendments to Small Business and Jobs Credit Act to Spur Job Creation, Business Investment
Washington, DC – As the Senate considers the Small Business and Jobs Credit Act this week, Michael Bennet, U.S. Senator for Colorado, is continuing his fight to help Colorado’s small businesses access lending, create new jobs and keep our economy on the road to recovery.
Though the economy is beginning to show signs of recovery, small businesses and entrepreneurs that are ready to grow and create jobs are still struggling to obtain access to credit and lending in the aftermath of the financial crisis. As a result, the jobless rate still hovers near 10 percent and uncertainty about the durability and sustainability of our recovery remains.
To assist our small businesses and entrepreneurs, Michael Bennet has introduced several amendments to the Small Business and Jobs Credit Act, which the Senate is considering this week.
“We need to work towards solutions that give our small businesses and entrepreneurs the resources and relief they need to start up, grow and create new jobs,” said Bennet. “Coloradans are dealing with the worst Recession since the Great Depression and Washington has been gridlocked. It’s time for Washington to get its act together, put aside the partisan bickering and get the job done on behalf of the American people. Instead of playing politics, people in Congress need to start working towards solutions that put people back to work and keep our economy headed in the right direction.”
The Small Business Jobs and Credit Act provides 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; a pilot program that would allow certain non-profits to participate in the SBA’s 7(a) guarantee program; 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—businesses with five or fewer employees and less than $1 million in revenues—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.
4. Creating a Small Business Credit 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 could 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 would allow up to 12 mission-driven SBLCs across the country to participate in the SBA’s 7(a) guarantee program. These new SBLCs must conduct substantially all of their lending in low-income communities and have a record of healthy loan portfolios.
6. Expediting Patents for Small Businesses
Bennet is pushing to add additional small business resources to the Patent and Trademark Office to expedite patent applications for small businesses, individual inventors and non-profits. These new funds 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.”