The Hill News

Small businesses account for 60-65% of jobs created during an economic rebound. However, hiring continues to be abysmal in large part due to the inability of small businesses get adequate access to capital for investing and expanding operations. In this upside-down real estate market, depressed home prices mean that small businesses cannot get home equity loans, forcing them to go to banks for capital. But the banks aren’t lending. Last year, banks rejected 60% of small business loan applications, and they reduced small business loans by 20% during the last recession. On the other side, credit unions increased loans by 40% during the last recession, but their lending has been capped by an outdated law that suppresses small business access to capital and deters smaller credit unions from serving these businesses.

To fix this, Congress is considering the Credit Union Small Business Lending Bill, S.2231, which raises the current credit union lending cap from 12! .25% to 27.5% of assets. For small businesses, increasing the lending cap means more capital; for workers, it means more jobs; and for the economy, it means more investment and increased economic output. The increased lending is predicted to generate $13 billion in investments and 140,000 new jobs, as well as produce other significant indirect benefits to the overall economy.

Read more...