Democrats in both houses have proposed legislation to solve some of the capital problems small businesses still experience. If passed during the economic recovery, the bills would increase the government backing for bank loans and offer owners the opportunity to develop science and technology for the government.
Senator Landrieu and Representative Velazquez Still Follow President’s Lead
For the second year, the chairs of the two small business committees are acting to fulfill the President’s small business agenda. Senator Mary Landrieu (LA) said she supports all of his initiatives for increasing both the activity on main street and export volume. In her words, the measures are “simple, inexpensive ways we can make a big impact.” (Landrieu Praises President’s Commitment to Make Small Business a Key Priority). Representative Nydia Velazquez (NY) also approves of the agenda.
Obama made statements during the State of the Union speech proposing to help small businesses grow and create jobs. The first goal is to put more government dollars behind loans and credit offers so entrepreneurs can secure funds to finance plans. With more capital in the coffers, companies can afford to hire more workers.
Proposed Legislation Would Support Enterprise Success
The lawmakers are concerned many entrepreneurs still do not have the finances they need to float their boats during this period of economic uncertainty. Now that the recession has continued for over a year, reduced lending has prevented new start-ups and limited growth. More than 85 percent of the jobs lost were at small businesses.
Bill measures would increase government financial assistance to close the funding gap caused by the large drop in available credit. The Senate Committee on Small Business and Entrepreneurship approved the Small Business Job Creation and Access to Capital Act last December. If passed by the House, the money for the Small Business Administration’s 7(a) loan guarantees would increase and the guarantee limit would go up. The House passed similar legislation with a bipartisan vote of 389 to 32.
Without legislative action, two popular SBA programs for scientific and technological development will end. Entrepreneurs can benefit from government funding when they agree to work on new ideas for the Small Business innovation Research program or the Small Business Technology Transfer program. The two programs will receive lengthy extensions to 2020 and 2015, and more budget funds, if the SBIR/STTR Reauthorization Act passes the House.
The Small Business Export and International Trade Act would raise the SBA’s limits for total outstanding loans to small businesses that engage in international trade. Senators chose this proposal for the years Obama wants to create jobs by increasing exports. The congresspersons know owners of small enterprises contribute 29 percent of the export volume, but foreign trade is often too costly.
The House’s Ranking Republican Committee Member Stays on Middle Ground
Although Representative Sam Graves (MO) believes in creating jobs by stimulating small business growth, he opposes the legislative plan because owners would have too many financial limitations. (Opening Statement for Hearing on “Increasing Access to Capital for Small Business,”). With higher taxes to pay for health care, the greater loan funds are offset. In the Republican’s view, the enterprises can rely on entrepreneurial initiative to grow again if capital availability returns to a middle level, in between the height in 2010 and the low in 2013, and government does not regulate the growth.
Assistance Depends Upon Adequate Bipartisan Support in the House
The price small businesses have to pay for taxes could limit Republican support. The Senate Committee led by Mary Landrieu has approved the slate of bills that increase availability of funds for enterprises here and abroad. But, the full Presidential agenda has House Republicans concerned the funds will not be enough for owners to overcome cost concerns.
Representative Velazquez will have to convince enough Republicans they can trust that giving the SBA more money will improve the numbers of success stories. Without entrepreneurial success, the bipartisan goal for job creation can not be met.