[Congressional Record Volume 156, Number 107 (Tuesday, July 20, 2010)]
[Senate]
[Page S6009]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                    SMALL BUSINESS LENDING FUND ACT

  Mr. BAUCUS. Mr. President, this week the Senate also returns to the 
small business jobs bill. Small businesses are central to our efforts 
to create jobs. Unemployment insurance helps people who are out of 
work. We want to help create the jobs so people can get the work.
  Small businesses employ half of America's private sector workforce. 
In my home State of Montana, small businesses employ more than 90 
percent of all private sector employees. Over the past 15 years, small 
businesses have created two-thirds of Americans' new jobs. That is 
about 12 million new jobs.
  Historically, during recessions, small businesses bear the brunt of 
employment losses. The great recession has been no exception. Over the 
course of the great recession, small firms have accounted for between 
64 percent and 80 percent of net job losses. Plainly, to create jobs, 
we need to find ways to help small businesses.
  Small businesses continue to face significant obstacles to expanding 
and hiring. One of the biggest obstacles is getting capital. A recent 
study by the National Federation of Independent Business found that 
only half of small businesses trying to borrow are able to get the 
capital they need. Nearly a quarter are not able to get any credit at 
all. Compare that to 2005. Five years ago, 90 percent of small 
businesses were able to get the capital they needed, and only 8 percent 
were not able to get any credit at all--a big change.
  Small business lending has dropped. From the second quarter of 2008 
to the third quarter of 2009, small business borrowing fell by more 
than $20 billion. A number of factors have contributed to this decline. 
Banks have tightened lending standards and terms for new credit. Banks 
have reduced risky assets to improve their capital positions. Falling 
real estate values have limited the ability of small business owners to 
use their own assets to guarantee or collateralize loans. And credit 
card terms have also worsened.
  Over the course of the great recession, small businesses in my home 
State of Montana have faced many of these obstacles. For example, 
Grains of Montana--that is a restaurant and bakery based in Billings--
had trouble finalizing the terms of its SBA loan. This delayed the 
expansion of their bakery. And when a potential franchisee in Arizona 
was unable to secure funding, the deal fell through. Companies such as 
Grains of Montana need to get capital to grow and to hire new 
employees. We must act to get credit flowing. We must increase access 
to capital so small employers can begin hiring again. That is exactly 
what the small business jobs bill would do.
  The small business jobs bill includes a provision that would 
completely eliminate the tax on the sale of certain small business 
stock purchased from the date of this bill's enactment through to the 
end of 2010 and held for 5 years. This proposal would provide a 
powerful incentive to invest in small entrepreneurial firms right now.
  The bill also includes a provision for certain small businesses that 
expands the carryback period for general business credits determined 
this year from 1 year to 5 years, and our bill allows these general 
business credits against the alternative minimum tax.
  Another provision would temporarily shorten the holding period 
required after a C corporation converts to an S corporation in order to 
avoid triggering a gain on assets. This provision would allow small 
businesses to increase their liquidity by selling assets that would 
otherwise be subject to an additional layer of tax.
  All of these provisions free up business capital for expansion and 
job growth. In past recessions, small firms were the first to begin 
hiring again. We must ensure that this trend continues as we recover 
from the great recession. We can achieve this by helping small 
businesses get the capital they need.
  I urge my colleagues to support the small business jobs bill.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. CASEY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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