Almost 1 Million Small Businesses in Pennsylvania Will Reap the Benefits of Legislation WASHINGTON
Congressman Paul E. Kanjorski (PA-11) voted for H.R. 5297, the Small Business Jobs Act, which passed in the House by a vote of 237-187. The legislation is expected to create 500,000 new jobs throughout the country by helping to encourage growth and hiring at small businesses that are struggling during these difficult economic times. The legislation will specifically impact almost one million small businesses in Pennsylvania, according the U.S. Small Business Administration (SBA) by enabling community banks to lend to financially stressed small businesses, which will help them expand and hire more employees. It will also provide needed tax cuts for small businesses to help them use that capital to further their operations and grow. This legislation is fully paid for and will reduce the deficit.
“Too many small businesses throughout Northeastern Pennsylvania and the country are struggling,” said Congressman Kanjorski. “Many local business owners have told me that they are unable to get the loans they need to continue and expand their operations. As a result, their businesses remain stagnant and they are unable to grow and hire. My priority is to boost our economy, create jobs, and encourage small business growth. Our nation’s community banks are the primary source of funds used by the small businesses which are an essential component to a thriving economy. By lending an additional $30 billion to community banks, the federal government is working to ensure those banks are able to lend to small businesses, so that those businesses can then grow and hire more employees.”
H.R. 5297 works to create jobs and encourage growth and investment in small businesses by:
- Expanding the availability of credit to small businesses through a lending fund
The bill creates a $30 billion Small Business Lending Fund to provide small, community banks with needed capital to help increase lending to small business. During these difficult economic times, many banks have curtailed lending and small businesses are unable to access the capital they need to maintain their operations, grow, and hire more employees. The lending fund will help rectify this problem.
- Increasing investments in small businesses through grants and SBA loans
The bill invests $1.5 billion in grants to support $15 billion in new small business lending through already successful state programs. It also expands access to SBA loans by eliminating fees on many loans and raises the cap on loan limits for many loans from $2 million to $5 million. It increases government guarantees on many loans from 75 percent to 90 percent through the end of the year, reducing the risk for banks to lend to small businesses because those loans are backed by the government. Additionally, the bill increases microloan limits from $35,000 to $50,000.
- Encouraging small business investments, growth, and hiring through tax cuts
The legislation provides tax cuts to help give small business more cash so that they grow and hire more employees by doubling and enhancing small business expensing for write offs such as equipment and machinery in 2010 and 2011, and allowing small businesses to write off 50 percent of the cost for new equipment investments in 2010.
- Promoting entrepreneurship and the creation of more small businesses through tax cuts
The bill doubles the tax deduction for start-up expenditures for new small businesses to $10,000 and creates tools to help small businesses gain access to the international market.
- Advancing fair competition for small businesses
The bill improves tax fairness by preventing small business from incurring significant costs from taxes aimed at large corporations, allows self-employed taxpayers to deduct health costs for payroll tax purposes, and closes loopholes that too often send government contracts to multinational corporations rather than small businesses.