SEMA urged the United States Senate to pass H.R. 5297, the “Small Business Jobs and Credit Act.” The House passed the bill in June. The legislation would create a $30 billion fund to provide banks with less than $10 billion in assets to access capital to lend to small businesses.
“During the past two years, banking relationships have changed for many of our SEMA-member companies,” said Chris Kersting, SEMA president and CEO. “Businesses that have enjoyed years of profits and expansion have had loan requests rejected and credit limits restricted. The reduction in access to capital is prolonging a stagnant economy and producing unnecessary anxiety for businesses and consumers alike.”
In a letter to the Senate, SEMA supported an infusion of capital into smaller banks, with incentives for those banks to offer small-business loans. The funds could be crucial in supporting job growth and economic expansion. The bill also includes a SEMA-endorsed extension of the bonus depreciation program, which allows businesses to write off 50% of the cost of newly purchased depreciable property. The depreciation was permitted in 2008 and 2009. A one-year renewal would encourage companies to invest in newer, more-efficient equipment and spur sales and create jobs.
The legislation would also extend the Section 179 provision, which allows companies to write off up to $500,000 in capital expenditures in tax years 2010 and 2011. Coupled with the extended time period, this expansion would represent a doubling of the current limit.
“SEMA will continue to work with lawmakers, regulators and the banking industry to spur lending,” said Kersting. “Making money and credit available to industry is the lifeblood to this nation’s economic growth. Enacting H.R. 5297 into law is vital towards achieving this goal.”