In a recent speech regarding the economy, President Obama acknowledged the challenges small businesses face, especially in the tightened credit market. He discussed how the small business lending bill, still pending at that time, would help the efforts for economic recovery. On Thursday, the senate finally passed that bill after Republicans had it filibustered for months.
The federal bill is designed to help employers get the capital necessary to hire more people and expand their operations. The bill generates a $30 billion fund that the government will disperse to community banks around the country to ultimately lend to small businesses. It also includes $12 billion in tax breaks for small businesses.
“It will more than double the amount small businesses can borrow to grow their companies,” said Mr. Obama. “It’s written by Republicans and Democrats and has been praised by the Chamber of Commerce.”
Many members of the Naperville Area Chamber of Commerce, as well as local bankers, are in favor of the measure.
“All in all, small business is going to be the engine that drives this economic recovery,” said Chamber President and CEO John Schmitt. “They’re the ones that create jobs. They’re the ones that create this vitality and we really need to do whatever we can to help small businesses flourish.”
“It raises SBA spending limits and raising those limits will allow businesses that are out there and needing capital to shift some of the risks away from the banks to the small business administration,” said Pat Benton, President of First Community Bank in Naperville. “They provide a guarantee for us so that in some cases, a business is not able to borrow on their own, might actually be able to borrow with that SBA guarantee.”
In addition to the federal measure, the State of Illinois now offers a $2,500 tax credit for small businesses that hire a new full-time employee. The goal of both initiatives is to reduce the unemployment rate, which in Illinois remains higher than 10%.
For more information on the state small business tax credit, employers can apply online at www.jobstaxcredit.illinois.gov.
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