Small business owners, get ready! The Small Business Jobs Act has cleared the second of three hurdles on its path to being passed.
CNN reported that the bill, which the House of Representatives already signed off on, passed through the Senate today after months of deliberation. Now the Senate’s version awaits the House’s approval before President Obama signs it into law.
The measure is expected to create 500,000 jobs, according to a Senate summary of the bill. Hiring by small businesses, considered a key driver of job growth, has been shrinking over the last two and a half years.
The bill, which passed the Senate vote 61 to 38, aims to spur hiring by making credit more available to small businesses. The number of loans has dropped by 17.8% since the second quarter of 2008 and the total value of those loans plunged by $60 billion to $650 billion, according to data from the FDIC.
Obama has been intent on signing this into law for some time. Because while small businessmen figure to be the immediate beneficiaries of the Small Business Jobs Act, the title of the bill indicates Obama’s true motive. He wants more job creation in the private sector.
Small business growth is crucial to achieving that goal, especially in smaller markets. But the financial crisis has curbed small business expansion nearly to a halt.
The president believes that small businesses will continue to be responsible for as much as 80 per cent of job growth as the country slowly climbs out of the recession.
The $43.5 billion bill should expedite this process in four ways:
- A $30 billion Treasury Department fund specifically for providing cheap capital to the community banks that do the majority of small business lending.
- A $12 billion tax break that will encourage investing in small business and spending by business owners.
- $1.5 billion in grants allotted to state lending small programs that work with small businesses.
- Raising the limit on government-backed loans to businesses.
The GOP opposed the bill mainly for what they felt it lacked. Many republican leaders were adamant that the bill include additional income tax cuts for business owners.
Though big government spending has come under much heat (yeah, we read your comments), small businesses and job-seekers stand to benefit from this stimulus. A two year stretch without access to credit appears to be coming to an end for small business owners, provided the bill makes it through the House a second time.
We just hope there are consumers ready to spend money and bankroll small business expansion.
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