Small Business Jobs and Credit Act of 2010; By: Kary Guthrie

Small Business Jobs and Credit Act of 2010

The small business jobs and credit act of 2010, approved with the help of Rep. Nick Rahall, will allow the secretary of treasury to make capital investments in small firms. This will create jobs and increase availability of credit. This legislation aims to strengthen small businesses while offering tax incentives to those companies.

According to Rahall, “Small businesses are the engine of our economy, creating two-thirds of the new jobs over the last 15 years, yet they continue to face a lack of credit and tight lending standards.” This bill will work to guarantee that the small businesses will receive the credit that is necessary.

The act will establish a new $30 billion lending fund, which will leverage up to ten times as much additional private lending activity. There are safeguards built in to guarantee that funds go to the small businesses that will make certain of job creation. The act will also provide tax relief by decreasing capital gains taxes on the institution’s investments and increase tax deductions for entrepreneurs, starting their business. While the small businesses will receive revenue and capital investment, they will have a 10-year deadline to repay the amount back.

Legislation will require this program to extend to companies with an average size of 500 or fewer employees, but in no instance will the legislation extend to companies with more than 750 employees. It will also require credit support to target loans with an average amount of $5 million or less, but no more than $20 million.

This legislation will cost taxpayers $12 per American over the 2011-2015 period, but with this small increase, it will end up saving taxpayers $1 billion or more in assets over the next ten years,

On Thursday, June 15, the legislation passed in the U.S. House of Representatives by a roll call vote of 241 – 182. The legislation arrived in the Senate on June 18, which called for a second cloture motion on the bill that was withdrawn by unanimous consent. An amendment will be added to the bill that will change IRS rules about company provided cell phones. The bill will return to the Senate floor next week.