Contact: Zach Lowe (202) 224-8657
Washington, D.C. – U.S. Senator Russ Feingold joined Wisconsin small businesses today in lauding passage of the Small Business Jobs Act, which will free up credit to help small businesses expand and create jobs. The legislation, which passed September 16th, raises loan limits, waives loan fees, boosts loan guarantees and cuts taxes on small businesses. In addition to $12 billion in small business tax cuts, the legislation lifts the cap on several popular Small Business Administration (SBA) loan programs.
“The lack of available credit is a problem I have heard a lot about from Wisconsin small business leaders since the recession started,” Feingold said. “Small businesses are the engines of our economy and are responsible for the majority of jobs created in this country. By passing this bill today, we are helping these engines of our economy expand and create new jobs as we continue to bounce back from the worst recession since the Great Depression.”
Russ Klisch, the owner of Lakefront Brewery in Milwaukee, Wisconsin, says the small business bill can help businesses like his create jobs.
“The passage of the bill will allow the brewery to obtain a SBA loan to buy equipment and hire more employees,” Klisch said. “Although the brewery is up in sales by 24 percent this year it has been unable to obtain financing without the 90 percent guarantee this bill offers.”
Rabecca Root is co-owner of The Fun Company, an arcade game manufacturing company based in Necedah, Wisconsin. The company is hoping to open a manufacturing plant and retail store in New Lisbon. The company predicts that expansion could bring 15 to 30 jobs to the area. With passage of the Small Business Jobs Act, The Fun Company could save thousands of dollars in fees.
“Juneau County in Wisconsin is a very depressed area. If the small business bill would pass through, it would allow us more funds to help stimulate the county,” said Root.
Dr. Carin La Count is an optometrist with Family Focused Vision Care in Sherwood, Wisconsin. Despite the fact that her practice is growing and loan payments have never been missed, her lender is requiring her SBA loan be 90 percent guaranteed. The Small Business Jobs Act boosts loan guarantees for the 7(a) loan program from 75 percent to 90 percent, helping ensure her optometry clinic will be able to provide critical vision care for her community.
“My practice is young, only four years old, and therefore has a great deal of start-up debt. Even though we’re growing and haven’t missed a loan payment, my lender requires a 90 percent guarantee on my loan,” La Count said. “Boosting the loan guarantee means our doors can stay open.”
Fact Sheet: Small Business Bill
Bill Highlights
Increasing Access to Credit – The bill would increase the capacity of SBA loan programs, in particular, the 7(a) loan program, 504 loans and microloans. According to the Small Business Administration website:
The 7(a) loan program is the Small Business Administration’s primary and most flexible loan program, with financing guaranteed for a variety of general business purposes. It is designed for start-up and existing small businesses, and is delivered through commercial lending institutions.
The bill increases 7(a) loan limit from $2 million to $5 million.
The 504 loan program provides long-term, fixed-rate financing to acquire fixed assets (such as real estate or equipment) for expansion or modernization. It is designed for small businesses requiring “brick and mortar” financing, and is delivered by CDCs (Certified Development Companies)—private, non-profit corporations set up to contribute to the economic development of their communities.
The bill increases 504 loan limit from $1.5 million to $5.5 million.
The microloan program provides small, short-term loans for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery and/or equipment. It is designed for small businesses and not-for-profit child-care centers needing small-scale financing and technical assistance for start-up or expansion, and is delivered through specially designated intermediary lenders (nonprofit organizations with experience in lending and technical assistance).
The bill increases the microloan program limit from $35,000 to $50,000.
Tax Breaks for Small Businesses –The legislation includes $12 billion in tax cuts targeted to small businesses. Among them are:
Allow investors in small businesses to take a 100 percent exclusion from capital gains taxes on small business investments made in 2010;
Temporarily increase the maximum deduction for business start-up expenditures in 2010 and 2011 from $5,000 to $10,000, subject to a $60,000 threshold;
Increase the Section 179 expensing provision to allow small businesses to immediately expense up to $500,000 (up from $250,000) of the cost of tangible personal property, including up to $250,000 of the cost of improvements to leasehold property, restaurant property, and retail property;
Allow self-employed taxpayers to deduct health care costs for payroll tax purposes on their 2010 tax returns;
Extend Recovery Act provisions that allow businesses to immediately write-off 50 percent of the cost of capital expenditures for 1 additional year for qualifying property purchased and placed into service in 2010;
Expand bonus depreciation to allow long-term contractors that use the percentage-of-completion method of accounting to elect bonus deprecation on property whose depreciation term is less than seven years;
Allow small businesses to use all types of general business tax credits to offset AMT liability; and;
Allow small businesses with less than $50 million in average gross annual receipts for the prior 3 years, to carry back unused credits for 5 years
Export Enhancement for Small Businesses – The legislation would improve the Small Business Administration’s (SBA) trade and export finance programs, elevate the Office of International Trade within the SBA, and add export finance specialists to the SBA’s trade counseling programs. The bill would also establish the State Export Promotion Grand Program, which is designed to increase the number of small businesses that export goods and services. It is estimated that these provisions would leverage more than $1 billion in export capital for small businesses, creating or saving as many as 40,000-50,000 jobs in 2010.
Small Business Contracting – The legislation would improve opportunities for small business to access federal contracts and ensure prompt payment to small business subcontractors. It is estimated that increasing contracts to small businesses by just one percent could create approximately 100,000 jobs and infuse billions of dollars into small businesses nationwide.
Offset
The bill is fully offset through the closure of tax loopholes so as to not increase the deficit.
Outside Support for the Small Business Jobs and Credit Act
The National Small Business Association (NSBA) has endorsed the legislation.
Todd McCracken, NSBA President: “Putting money in the pockets of both consumers and small business people so they can take advantage of the opportunities when they come along is crucial.” – CNN, September 5, 2010
Small Business Majority
Senator Feingold’s Recent Efforts on Behalf of Small Businesses
Voted in support of the HIRE Act, legislation creating a payroll tax credit for businesses that hired a worker who had been unemployed for more than 60 days. (Vote #25, 111th Congress, 2/24/10)
Voted in support of making tax credits available to more than 80,000 Wisconsin small businesses as part of the Patient Protection and Affordable Care Act. (Vote #396, 111th Congress, 12/24/09)
Introduced legislation to expand and extend the jobs tax credit enacted by the HIRE Act. Feingold’s legislation would offer a jobs tax credit to any business that hired new workers, increased hours for current workers or expanded its payroll. (S.2955)
