Today, Congressman Tom Perriello voted to support Main Street businesses that are the engines of our economy by creating a Small Business Lending Fund. The legislation, which is fully paid for, will create a $30 billion lending fund for community banks that could leverage up to $300 billion in private investment. Unlike the failed big bank bailout of 2008, which Perriello opposed, this proposal rewards responsible actors and directs lending to where it is needed most: small businesses on Main Street.
"Congress made a huge mistake in 2008 by bailing out failure instead of rewarding accountability. That's not the way the free market works. The big banks took the money and still don't lend to our small business owners and entrepreneurs. Week after week, I hear the same thing from our Virginia businesses -- no one will lend. This proposal is fiscally responsible and will finally be a victory for Main Street over Wall Street," said Perriello.
Under the Small Business Jobs and Credit Act (H.R. 5297), small- and medium-sized community banks (assets of $10 billion or less) who participate in the lending fund will be subject to tough new performance-based incentives to make sure they are lending to small businesses. If they increase small business lending, their dividend rate for repaying the government will drop; if, however, they reduce small business lending, their dividend rises. The Congressional Budget Office estimates that the lending fund will save taxpayers $1 billion over 10 years, as banks are expected to pay back these funds over 10 years with interest.
Local realtors and home builders also expressed their support for the legislation. Greg Slater, President of the Charlottesville Area Association of Realtors said, "The Charlottesville Area Association of REALTORS® is very pleased that Representative Perriello supported the Small Business Lending Fund Program. The commercial financing sector in real estate has been negatively impacted by the troubles in residential financing and this legislation will provide some needed relief for small businesses. Small business financing has been hard to come by and this Fund will help provide the needed capital to keep business working for America."
Jay Willer, Executive Vice President of the Blue Ridge Home Builders Association, added, "As other factors seem to be slowly improving in this area's residential housing industry, one of the problems I'm still hearing about consistently is the continued difficulty good builders are having in getting credit to make new starts. That's crucial to steadily rebuilding strength in this important local industry."
The Small Business Lending Fund victory followed on the heels of another key bill to support small businesses. On Tuesday, Rep. Perriello also supported H.R. 5486, the Small Business Jobs Tax Relief Act, which contains two key provisions that he has co-sponsored in Congress. First, it will decrease the capital gains tax for those who invest in small businesses this year. The bill would exclude 100% of capital gain income for stock in small businesses purchased from March 15, 2010 to January 1, 2011, spurring private investment in small businesses. Secondly, it will increase the deduction for start-up expenditures from $5,000 to $20,000, allowing small business owners to recover more of their start-up costs and freeing them up to create new jobs.