WASHINGTON - Nearly everyone in Congress agrees that small businesses are the engines of job growth. Recently, we put our words into action by passing the Small Business Jobs and Credit Act, which will help these businesses survive and thrive, keeping current workers on the payroll and creating new jobs.
I'm especially pleased that this bill tackles a key problem that small businesses now face: difficulty in obtaining the capital they need to operate, expand and grow. One of the most important ways in which it will do so is through the State Small Business Credit Initiative, a program I helped develop to provide badly needed assistance to state and local programs across the country that help small businesses grow. I'm especially proud that this effort was inspired by Michigan's own small business programs.
Just as the recession has battered the value of our homes, it has also battered the value of business property, such as real estate, factories and equipment. That has damaged the ability of small businesses to get bank financing because it has lowered the value of property they can offer as collateral. And so, businesses with plenty of customers and excellent credit histories have been unable to get the financing they have relied on and need, endangering existing jobs and preventing creation of new jobs.
Sen. Carl Levin
Michigan and many other states have begun programs designed to deal with this problem.
Thanks to our collateral support program in Michigan, companies like Saline Lectronics, an electronics manufacturer in Washtenaw County, and Display Pack, a packaging company in Grand Rapids, have been able to expand production and add workers. Just since 2006, with just $3 million in state money, Michigan's Capital Access Program has leveraged nearly $88 million in private lending, and saved or created an estimated 13,000 jobs.
But the demand for this successful program far exceeds the resources available. In Michigan and elsewhere, these programs can't help enough of the businesses that could effectively use support. Lack of resources for small businesses is stifling job creation by small business. And so the legislation we recently approved includes the State Small Business Credit Initiative, which will make available $1.5 billion in grants to state and local programs that help small businesses get the loans they need. It will help provide many times that much in private loans to small businesses.
There are other major provisions of this bill that will help small businesses create jobs. It contains $12 billion in tax cuts for small businesses, tax cuts that will help them put their money into growing their businesses and creating new jobs. It will more than double the limits for two of the Small Business Administration's most important loan programs and provide other enhancements to SBA loan programs enhancements that will increase lending to small businesses by over $5 billion in the first year.
The bill also includes a proposal I suggested for an Intermediary Lending Pilot Program, which allows SBA to make loans to intermediary lenders such as business incubators, which can then loan that money to growing businesses.
It also includes the Small Business Lending Fund. This provision will provide capital to local, community banks, the banks on which small businesses depend, so they can in turn lend that money to small businesses. And it does all this in a way that will not add to our budget deficit. In fact, the entire bill is fully paid for, so none of its provisions add to the deficit.
We cannot afford to miss opportunities to boost employment, because the hundreds of thousands of people in Michigan, and the millions across the country, who have lost their jobs in this recession deserve our very best efforts. With passage of the Small Business Jobs Act, we've given small business powerful tools to add new workers.
EDITOR'S NOTE - Carl Levin, a Democrat, represents Michigan in the U.S. Senate.