TMCnet: Kilroy’s Lending Bill Included in Major Job Creating Measure

Sep 29, 2010 (Congressional Documents and Publications/ContentWorks via COMTEX) — Washington, DC–U.S. Representative Mary Jo Kilroy’s Small Business Intermediary Lending Pilot Program Act, a bill that would create a three-year lending pilot program for small businesses, passed the House of Representatives today as part of the Small Business Jobs Act. The pilot program would give small businesses the capital to create jobs by providing them with low cost, long term loans through the Small Businesses Administration (SBA).

“Small businesses are the engines of job growth in our country and it is up to us to give them the fuel to succeed. My bill will break the barriers to credit that central Ohio businesses face so they can continue to stimulate the economy and put Ohioans back to work,” said Kilroy.

Small businesses need access to affordable credit to start-up and expand. While the Small Business Administration’s (SBA) microloan and 7(a) loan programs address the needs of many small businesses, some need larger loans than the microloan program offers but do not qualify for traditional loans backed by the 7(a) loan program for a variety of reasons, most often a lack of sufficient collateral. This creates a “gap” in the SBA loan program into which many small businesses fall.

Kilroy’s bill seeks to tackle this problem by authorizing the Small Business Administration to provide up to $1 million to community development organizations to make low-cost, flexible loans of up to $200,000 to local small businesses looking to start up or expand. The pilot program is modeled after a successful existing program in the U.S. Department of Agriculture, which has proven effective in stimulating economic activity in rural areas. Unlike the USDA program, Kilroy’s pilot program will serve both urban and rural regions.

The Small Business Intermediary Lending Pilot Program Act was included in a larger bill to help small businesses attain the capital they need to grow and hire new workers. The Small Business Jobs Act is projected to create 500,000 new jobs. Other provisions in theSmall Business Jobs Act are provided below: * Creates a Small Business Lending Fund to deliver loans to small businesses through a new $30 billion lending fund for small- and medium-sized community banks ($10 billion or under) that could leverage up to $300 billion in lending. The legislation includes tough performance-based incentives to make sure that these banks lend to small businesses.

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