Congressman Mark Schauer: Representing Michigan's 7th District

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WASHINGTON, Oct 29 - Today Congressman Mark Schauer voted to create new jobs and stimulate the economy by providing small businesses with access to the loans and investment dollars they need to expand and grow their operations. The Small Business Financing and Investment Act (HR 3854) will help open tight credit markets that have shut out small business owners during this economic crisis, so they can create jobs – particularly in struggling regions and industries.

“Small businesses are the number one source of new jobs in this country” said Schauer. “By helping small businesses grow, we will create jobs for Michigan workers and get our economy back on track.”

Small businesses create 60-80% of new jobs every year, but the current economic crisis has frozen credit and made it difficult for American small businesses to get the financing they need. By comprehensively updating the Small Business Administration’s capital access programs, the legislation is expected to support $44 billion in lending and investment for smaller firms.

SCHAUER REMARKS, AS PREPARED FOR DELIVERY ON THE HOUSE FLOOR:

During debate on the House floor, Schauer told the story of how a small business owner in Delta Township was able to create 10 jobs with a loan through the Small Business Administration.

“The Small Business Administration has played a key role in the current economic crisis in helping businesses and manufacturers maintain access to credit. But we need to do more. Michigan’s unemployment numbers are still unacceptably high, and counties in my district still suffer from unemployment rates higher than 15 percent.

“Local businesses tell me every day that they are ready to invest and hire more employees. Unfortunately, they are having trouble getting the credit they need to help get Michigan back to work. Earlier this year, we passed the American Reinvestment and Recovery Act, which created new programs to revitalize our small business and manufacturers.

“These programs have helped. With just a $12,500 government-backed loan, Diane Brabon, was able to create 10 new jobs at the Trusting Heart Home Health Services in Delta Township. Yet successful businesses are still starved for credit. With this amendment, the SBA will be able to guarantee loans that recognize the challenges small businesses are facing in high unemployment areas. I proudly support this amendment and I look forward to working with Rep. Peters and my other colleagues on finding ways to encourage more lenders to participate in these important programs.”

BACKGROUND:

• The Small Business Financing and Investment Act reduces paperwork required for SBA loans, making it easier for both small business borrowers and lenders to participate.
• The bill helps the SBA act as a matchmaker between lenders and businesses and, in times of tight credit, allows the SBA to step in and fill in the gaps when private lenders stop lending.
• H.R. 3854 also increases loan sizes, giving businesses access to larger amounts of capital. Conventional loan sizes increase by 30% to $3 million; other loan programs will provide as much as $25 million for small manufacturers.
• The legislation establishes a new training program to encourage lender participation, creating more choices for businesses seeking to acquire SBA-guaranteed loans.
• H.R. 3854 also creates a new grant program so small firms can receive grants of $100,000 in order to help them recover from disasters.
• A new program at the SBA will help smaller and solo health practitioners adopt Health Information Technology, improving patient care, reducing health care costs and helping speed the adoption of electronic health records among small practitioners.