Small Business Loan Bill Passes. What Is Next?
For those wondering whether our glorious Senate would ever pull its collective heads
out of the sand and start down the path of helping small businesses, I have some good news. For those unbelievers, we are talking none other than the United Sates Senate. First a word as to what happened on September 14th and what we can expect in the future.As you may recall, last year Obama proposed a 30 billion small business bill which contained tax incentives for small businesses and measures to help create more jobs. Unfortunately, it has languished in the Senate ever sense, with Republicans blocking its headway for fear it would increase deficits. It started as a bipartisan measure and was passed rather easily in the House on June 17, 2010.
Then, the Administration "beefed up" the legislation by including a $30 billion small business lending fund that would be paid by the US Treasury Department to participating lenders. Because of the public outcry to TARP I and the perception that money was simply given away without any strings to the large banks, the fund was only for community banks with assets less than 10 billion.
At that point, it went to the Senate. This is when partisan wrangling really began. After 192 amendments, it still was collecting dust in the Senate. For much of the summer Obama gently chastised the Senate for inaction and recently became bolder with his disapproval.
The ordeal finally came to an end on September 14th when the Senate was able to curry enough Republican votes to prevent a filibuster. At this point, a final vote of the Senate will probably occur by the end of the week and then it will be off to the house for final revisions. Obama says he is ready to sign any time thereafter.
So why is this important? Because there will now be $30 billion disbursed by the U.S. Treasury to small business lenders throughout the nation. Notice, it is small business lenders. The last thing the public wants to do is give more money to large banks. The interest rates will be between 1% and 5% from the Feds to the lenders. Hopefully, with a reasonable write-up, the banks will then re-loan at higher but manageable rates. As we all remember, the $350 billion TARP I monies did not result in much lending from large banks, although that was the idea. The avowed purpose of this legislation is to change that sad situation.
The bottom line is there are small business friendly lenders right now that would love to get their hands on this money. That in turn means that you can get your hands on needed capital as a small business owner.
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