Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Senate OKs small biz jobs bill

chart_small_biz_hiring_2.top.gif By Catherine Clifford, staff reporter


NEW YORK (CNNMoney.com) -- After months of debate and significant pressure from the White House, the Senate on Thursday passed a $42 billion bill aimed at helping small businesses.

The House passed its own version of the bill about 3 months ago. The Senate's version of the Small Business Jobs Act will now have to go back to the House, where it's expected to pass, before President Obama can sign it into law.

The measure is expected to create 500,000 jobs, according to a Senate summary of the bill. Hiring by small businesses, considered a key driver of job growth, has been shrinking over the last two and a half years.

The bill, which passed the Senate vote 61 to 38, aims to spur hiring by making credit more available to small businesses. The number of loans has dropped by 17.8% since the second quarter of 2008 and the total value of those loans plunged by $60 billion to $650 billion, according to data from the FDIC.

Without adequate credit, businesses can't grow and hire. The president started pushing for ways to get cheap capital to small businesses nearly a year ago.

What is in the bill: The Small Business Jobs Act authorizes the creation of a $30 billion fund run by the Treasury Department that would deliver ultra-cheap capital to banks with less than $10 billion in assets.

The idea is that community banks do the lion's share of lending to small businesses, and pumping capital into them will get money in the hands of Main Street businesses.

The bill would also provide a slew of tax breaks to encourage investment that will cost $12 billion over a decade, according to a preliminary estimate from the Joint Committee on Taxation.

The tax breaks increase the amount that a small business can expense for capital expenditures; encourage investors by allowing complete exclusion from capital gains taxes on small business investments; and increase the deduction for startup expenses, among a slew of other incentives.

The legislation also provides $1.5 billion in grants to state lending programs that in turn support loans to small businesses.

A third and popular provision of the legislation increases the loan limits on government-backed loans. It also extends the popular loan sweeteners for Small Business Administration loans through the end of the year. The sweeteners, initiated with the 2009 Recovery Act, have been a stimulus success story and small businesses have been in line waiting for more funding.  To top of page

Questions & Answers



QHow does a florist sell more in this economy? We changed our business to designing weddings and events only, as the everyday flowers are not selling. We had to throw out too much product at the end of the week -- flowers are perishable! More
Get Answer
- The Flower Lady, Suwanee, Ga.
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.85%3.87%
15 yr fixed2.96%2.98%
5/1 ARM3.14%3.19%
30 yr refi3.96%4.00%
15 yr refi3.06%3.08%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Sponsors

Sections

Efforts to unionize low-wage employees of fast-food franchisees and outside contractors get lift from decision of NLRB. More

Brazil's government announced that its economy fell into recession, shrinking 2.6% from a year ago. More

How do you run a successful crowdfunding campaign? Indiegogo's CEO Slava Rubin offers his top tips and mistakes to avoid. More

Mom and pop investors are dumping their investments and moving to cash at levels not seen since the financial crisis of 2008. More