Senate Passes Small Business Jobs and Credit Act
September 23, 2010

The Senate passed the Small Business Jobs and Credit Act of 2010 last week. The bill was written to lower taxes and make loans more readily available for small business owners. In addition, if enacted into a law, the bill would help small business owners access private capital to finance expansions and hire new workers, and would reward small business investors-in a long-term attempt to help small businesses compete with large corporations.

H.R. 5297, the Small Business Lending Fund Act, will establish a $30 billion fund to boost lending to small businesses looking to hire and expand their operations by providing additional capital to community banks, according to information from Rep. Barney Frank (D - Mass.), who is one of 21 co-sponsors of the bill.

He points out that the program is completely separate from TARP and mandates accountability and oversight by Congress, the U.S. Government Accountability Office, and the Treasury Department's Inspector General.

"Small businesses create two in every three jobs in this country. Helping them innovate and grow has to be our top priority," says co-sponsor Rep. Gary Peters (D - Mich.). "States are already engaged in extremely effective efforts to promote small business lending, and strengthening these efforts will create jobs across the country."

Co-sponsor Rep. Steve Driehaus (D - Ohio) adds, "Small businesses are responsible for the majority of new jobs in the United States, but every day I hear from small business owners who still aren't able to borrow. Job creation is our top priority, and we need to ensure that the businesses creating those jobs are able to invest and grow. This legislation is going to make it easier for small businesses in Cincinnati and across the country to access the resources they need and continue on the path toward recovery."

H.R. 5297 was approved by a vote of 42-23 and now moves to the House floor for consideration.

Independent Glass Association executive director Mike Russo says he expects the impact of the Small Business Jobs Act to be somewhat small toward the auto glass industry.

"The concept behind the Small Business Jobs Act is to make loans available to small businesses (at the community bank level), which in turn will use the funds to invest in their businesses, thereby spurring growth and the need to hire new employees," Russo told glassBYTEs.com™/AGRR magazine. "As it pertains to the AGRR industry, I do not see the Act as having a major impact. As I perceive the situation, most businesses currently operating in this industry are struggling, predominantly for reasons other than lack of capital. Competition is intense and profit margins are thin. It is not a business atmosphere that is conducive to growth."

However, Russo says if the industry were structured differently, there could be a positive affect from such a bill.

"In addition, the industry does not operate on free market principles having barriers to access to the customers and price controls," he adds. "So the expected benefit that Congress would hope for, at least in the AGRR industry, will not come to fruition due to other reasons. I hold the opinion that if the AGRR industry were functioning like a free market economy, the Act would probably would have some benefit-especially given the tight credit markets that small businesses are currently experiencing. Prior to the Act, small businesses had very limited access to loans."

What are your thoughts on this legislation? Please e-mail pstacey@glass.com.

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