[Congressional Record Volume 154, Number 13 (Monday, January 28, 2008)]
[Senate]
[Page S389]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      SMALL BUSINESS STIMULUS ACT

  Mr. KERRY. Mr. President, over the past few months, our country has 
experienced instability and volatility in its credit markets. This 
looming credit crisis is affecting virtually every sector of the 
economy, including small business financing.
  Since its inception in 1953, the Small Business Administration's 7(a) 
loan guaranty program has become the largest single source of long-term 
capital for small businesses. However, in the wake of the credit crunch 
and a slowing U.S. economy, we are now noticing that this essential 
financing resource is not serving nearly as many small businesses as it 
should. For example, during the first quarter of the 2008 fiscal year, 
7(a) lending was down by 12 percent compared with the same period last 
year. In addition, at his State of the Agency Address this past 
Tuesday, SBA Administrator Steven Preston acknowledged that SBA lending 
was down in its largest program.
  The Small Business Stimulus Act of 2008 will help reverse this 
downward trend in small business lending. The bill will temporarily 
reduce the fees collected from borrowers and lenders. This will 
immediately reduce the cost of capital for small businesses. With lower 
monthly loan payments, more money will be placed into the hands of 
small business owners money that will be quickly injected into the 
economy through purchases of inventory, real estate, and equipment. The 
fee reduction for lenders, coupled with the government guarantee, will 
give them an incentive to make 7(a) loans, as banks are scrambling for 
ways to salvage declining revenues and take on less risky loans. A 
similar stimulus was adopted after 9/11, and lending increased to 
businesses nationwide, pumping almost $3 billion into local economies 
and creating or retaining more than 90,000 jobs.
  The bill also provides additional funding for the SBA's microloan 
program. As its name implies, microloans are small-scale business 
loans, which provide an essential financing source to underserved 
members of the business population, including women and minorities. 
This bill provides $12 million to expand the SBA's microloan program, 
including $2 million that will help leverage nearly $20 million in 
microloans.
  The Small Business Stimulus Act of 2008 also includes two business 
tax incentives that will help small businesses that are feeling the 
impact of the economic downturn. The first provision would increase the 
amount that businesses can expense from $125,000 to $200,000 for 2008. 
This will help businesses immediately write off business purchases. The 
second provision increases the net operating carry back period for 
losses arising in taxable years ending in 2007 and 2008 from 2 years to 
5 years. This provision will help business with cash flow. Expanding 
the carry back allows business owners to balance out net losses over 
years when the business has had a net operating gain.
  I am confident that each of these targeted measures will provide 
timely, effective incentives to spur spending and encourage new 
investment and job growth in the hundreds of thousands of small 
businesses that drive this Nation's economy.

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