Senate Approves Cantwell-Backed Amendment to Create Small Business Lending Fund
Budget-neutral measure will leverage $300B in private-sector lending; relating stories from WA small business owners, Cantwell says 'this is about whether we're going to help Main Street ... or whether we're just going to say that Wall Street gets the ear of Congress'
WASHINGTON, DC – The Senate tonight passed an amendment championed by U.S. Senator Maria Cantwell (D-WA) to establish a Small Business Lending Fund (SBLF) designed to get lending capital flowing to small businesses and create jobs across America. The fund, strongly backed by Cantwell since it was first proposed by President Obama in January, would leverage $300 billion in private sector small business lending with a $30 billion public investment that would be entirely repaid to the federal Treasury. The government funds would encourage lending by community banks, institutions with under $10 billion in assets. All the money would be returned to the federal government, and the Congressional Budget Office reports that the government would end up reducing the deficit by $1.1 billion through this program. Cantwell helped coordinate a two-day Senate floor debate for the measure and voted with the majority of her colleagues to approve the amendment. The measure was added in a 60-37 vote to the broader Small Business Lending Act, which is still pending in the Senate.
“This is about a lending program for small business to save Main Street and save our economy because this Senator believes that job creation happens from small business. That’s a proven fact,” Senator Cantwell said in remarks today on the Senate floor. “Seventy-five percent of the increase in jobs comes from small business. But right now, they can’t get access to capital. Why is it that the other side of the aisle thought it was such a priority to bail out Wall Street…? Why is it that the other side doesn’t want to see the success of these small businesses?”
Click here to watch a video of Senator Cantwell’s full remarks as delivered. A PDF transcript is also available here.
Cantwell cosponsored the SBLF in an amendment led by Senators Mary Landrieu (D-LA), chair of the Senate Small Business Committee, and George LeMieux (R-FL). The amendment is also sponsored by Senators Murray, Merkley, Boxer, and Klobuchar. The measure would add the Small Business Lending Fund to a broader small business assistance bill being debated by the Senate. Click here to view the full bill text of the amendment.
There are 28 million small businesses in America, with 50 percent of working Americans either owning or working for a small business.
Click on the following links to learn more about Senator Cantwell’s efforts to get lending capital to small businesses:
July 21, 2010: Cantwell Urges Colleagues to Support Small Business Lending Fund
June 25, 2010: Cantwell Stresses Importance of Small Business Lending for Economic Growth
June 2, 2010: Cantwell, Murray Urge Leader Reid to Make Small Business Lending the Next Priority
The following are highlights of Senator Cantwell’s remarks as delivered today on the Senate floor:
This is about whether we’re going to help Main Street in tough economic times or whether we’re just going to continue to say that Wall Street gets the ear of Congress.
I can assure you that this legislation is focused at the problem that was caused by Wall Street. And many people across America are asking when we are going to stand up for small business in America and help Main Street recover from this economic disaster.
We got into this situation when large banks failed because of their active participation in things like credit default swaps and other derivatives that weren’t truly backed by financial commitments and basically became a house of cards.
And they brought down our entire economic system.
The practices of the larger banks of investing in credit default swaps and derivatives that had no basis ended up costing small businesses their access to capital because capital requirements were put on small businesses through their banks, at the same time large banks were given a bailout.
So no, no, this is not a bailout.
This is about a lending program for small business to save Main Street and save our economy because this Senator believes that job creation happens from small business. That’s a proven fact.
That’s a proven fact. 75 percent of the increase in jobs comes from small business. But right now, they can’t get access to capital.
Cantwell quoted from a letter written to her by a constituent and small business owner.
‘We’ve been a small business for over nine years and have had five restaurants in Washington state and we currently employ 150 people between five operations. Until September of 2008, our business was stable and we were expanding and adding jobs and tax dollars to state and federal coffers.
‘But then in September of 2008, after signing a 20-year lease for our first Arby’s Project, our lender pulled our financing due to economic conditions. This was the same lender that just three months earlier had refinanced over $3 million of our business debt. And even though we had excellent personal business credit, two business properties as collateral, good cash flow, we were forced to take high-interest equipment leases, advances from credit cards as well as cash advances and an almost, yes, 50 percent interest rate from finance companies with an 18-month term.
‘We tried going directly to the bank, to finance companies, but we were told we had no options. Instead the same bank charged an almost 50 percent interest rate through the finance company.’
It’s so important for us to say that we understand the plight, just like the gentleman’s letter that I read, that we understand the frustration that they’ve been through, that we are on their side making sure that small business gets access to capital, and that we believe that our economy isn’t about big banks but it is about those millions and millions and millions of entrepreneurs every day that go out there and are hard working and who’ve been told ‘no,’ told even on their lines of credit, ‘no you can’t have access anymore,’ to right that wrong that happened last year and a half and get capital flowing again to small business.
So I thank the Chairwoman of the Small Business Committee and I see my colleague from Washington, who has been outspoken about this since January on the importance of getting this done and has written many letters to try to emphasize how critical it is to our Washington state economy.