Murray, Cantwell tout $30 billion small business-lending bill
Washington's U.S. Senators Patty Murray and Maria Cantwell held a news conference this morning at Wallingford's Tutta Bella pizzeria to talk up the small-business lending bill Democrats are trying to push through the Senate.
The Small Business Jobs Act would create a $30 billion fund for community banks to lend to small businesses. It would also increase limits on existing Small Business Administration (SBA) loans and give small businesses additional federal tax breaks.
Supporters say the proposal, which passed the House in June, would free up credit frozen for many worthy small businesses.
But it has been blocked by a Senate Republican filibuster. Republicans have called the measure "TARP light" -- tapping public anger over earlier Wall Street bailouts.
Cantwell and Murray were joined by several Seattle business owners who related their stories of banks abruptly refusing to okay loans -- despite solid credit histories. That's stopped some of them from expanding their businesses and hiring new employees.
Murray criticized Senate Republicans for blocking the measure, accusing them of caring more about denying Democrats a legislative victory than helping small businesses.
Back in 2008, when Republicans needed Democratic support to bail out Wall Street, Murray said, they "rushed across the aisle." Murray has said she didn't like voting for that unpopular financial bailout, but thought it was the responsible thing to do given the financial calamity.
"We were told that Wall Street institutions like AIG and Goldman Sachs were too big to fail and we came together to ensure that the financial industry didn't collapse," Murray said.
"But now we hear that are that community banks and Main Street businesses are just too small to notice."
Rossi has opposed the lending plan as just another bailout. He says Congress should extend the Bush tax cuts and cut regulations if it wants to help businesses.
"This is TARP-light; it's just another taxpayer-funded slush fund for banks," Rossi said in a statement on the bill. "If Patty Murray really wants to help small businesses create jobs, she should extend critical tax relief and stop pushing through partisan, job-killing legislation like the recently passed financial regulation bill which strangles credit, making it nearly impossible for entrepreneurs to get small business loans."
The $30 billion lending fund would allow the U.S. Treasury Department to purchase preferred stock in small banks with assets of less than $10 billion. The banks would repay the money at an interest rate that would decline as their small-business loans increased -- encouraging them not to just sit on the cash.
The business owners on hand Tuesday said they could expand and hire people if banks would start lending again.
Tutta Bella owner Joe Fugere said he went through a frustrating saga trying to get a loan to open a new restaurant in Issaquah.
Despite a good history with a Tacoma-based bank, Fugere said he was denied a loan. Other large banks also rejected him, saying they didn't want to lend to "risky" businesses in a "risky" sectors like restaurants.
"Honestly i was shocked and deeply offended. I had a healthy profitable business, a blemish-free history of paying all of my loans on time in full. And now I was being told that I was risky, when in fact it really was their decisions on Wall Street that were risky and caused this recession," Fugere said.
Fugere said he was almost ready to give up on opening his new location, but made a personal appeal in Dec. 2008 to the head of Issaquah Community Bank (now called Bank of the Northwest). He got a loan and successfully opened his new restaurant, which employs 75 people.
Others said they're still struggling to get financing.
Hanna McElroy, owner of Magus Books in the University District, said her bank cut off a line of credit despite a history of business growth. She made up the difference with personal credit cards - a debt that then kept her from getting refinancing on her house.
"At this point I am extremely disappointed. I don't have a lot of hope," she said.
Murray and Cantwell said the bill will be taken up again once the Senate reconvenes in September.
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