In Advance of White House Jobs Forum, Brown Rallies Support for Small Business Emergency Relief Act
Trading Markets – One day before the White House convenes its job creation forum, Senate leaders will join together for a hearing titled "Removing Barriers to Job Creation: Are Banks Lending to Small Businesses That Are Ready to Hire?" Legislation authored by U.S. Sen. Sherrod Brown (D-OH), the Small Business Emergency Loan Relief Act, would temporarily raise maximum amounts for loans administered by the Small Business Administration (SBA).
"Small businesses make up the backbone of our economy and small businesses will lead us out of this recession," Brown said recently. "As we consider additional way to create jobs, we should make sure small businesses have the resources they need to expand operations and create jobs."
Small businesses have created 64 percent of new jobs nationally over the past 15 years, yet reports indicate banks have significantly cut back on Main Street lending. As chair of the U.S. Senate Banking Subcommittee on Economic Policy, Brown has been examining the effects of the credit crisis on small businesses and manufacturers. On Oct. 9, he convened a hearing entitled "Restoring Credit to Manufacturers," which featured expert testimony from the manufacturing and banking sectors to investigate ways to reverse the credit crisis. On November 18, Brown participated in a Small Business Financing Forum at the Treasury Department, hosted by Secretary Timothy Geithner and SBA Administrator Karen Mills.
Brown's legislation would temporarily raise the maximum loan amounts for the three main Small Business Administration (SBA) loan products: the 7(a) loan, the 504 loans, and the America's Recovery Capital (ARC) Loan Program. The 7(a) loan is SBA's main guarantee program, which authorizes loans made by SBA partners (banks and other financial institutions) and is guaranteed by the SBA. The 504 loan program uses nonprofit Community Development Corporations (CDCs) to provide long-term fixed-rate loans for assets such as land, structures, and equipment that promote local economic development. The ARC loan program, which was created through the American Recovery and Reinvestment Act of 2009 (ARRA), provides advances of up to $35,000, made by commercial lenders, to small businesses to make loan payments for up to six months.
