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Public Statements

Small Business Lending Act of 2010

Floor Speech

By:
Date:
Location: Washington, DC

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Ms. KLOBUCHAR. Mr. President, I come to the floor today in support of the small business jobs bill, which is moving through the Senate.

I first would like to say how much I appreciate Senator Landrieu of Louisiana and her leadership on this bill, as well as the members of the Small Business Committee, who have worked incredibly hard to bring this bill to the point it is ready to get voted on.

When we first began discussing how we could help our small businesses deal with the issues they face in this difficult economy, I spent a lot of time going around my State and actually talking to those who run small businesses, who work in small businesses, to get some ideas of what would really work. That is when I heard time and time again about how they desperately need capital.

In fact, according to the National Federation of Independent Business, 45 percent of small businesses in America say adequate access to capital is their No. 1 problem. I think this is summed up well in a letter I got from a constituent of mine. He founded his first real estate company over 20 years ago, and when the market went south, he did not just tighten the hatches, he actually invested his savings in a new home staging business to help people get their homes ready to be put on the market.

Wile his new business is profitable, he still cannot get credit. In the letter to me he said:

I have approached over 10 banks and guaranteed a loan using my building with a free and clear title, and have been turned down by every bank. The answer to growing the economy and creating jobs is getting the banks to lend to low risk entrepreneurs like me.

The great thing is, our community banks agree.

Last week on the Senate floor, I read a letter I received from Harry Wahlquist of Star Bank in Bertha, MN. As you can imagine, Bertha is not exactly a majority metropolis. Bertha, MN, is not New York City. I just want to read it again because I think it drives home the point that there is broad consensus that this bill is what we need. In this letter, the banker from Bertha said this:

I am a banker and need capital to continue serving my nine Minnesota towns. Please pass the small business lending bill now. You gave money to Wall Street. How about Main Street in Minnesota?

That is what this bill will do. It will help Main Street. It does it with more than a number of provisions to expand access to credit. It provides for a 100-percent exclusion on capital gains taxes on small business investments made in 2009 and 2010. It increases the maximum deduction for business startup expenses to help entrepreneurs get their businesses off the ground. It allows businesses of all sizes to write off more of their investments in property and equipment to help them grow.

Provisions like these are why this bill has such broad support. Whether it is the Chamber of Commerce or the Independent Community Bankers of America, they want us to work together to pass this bill.

We have gotten this economy off the cliff. We worked with our banks and our financial institutions 2 years ago. We also worked with the stimulus bill, with the Recovery Act. But we know the answer cannot just be government jobs. We know that. What we are looking at is how do we work with small businesses that create 65 percent of the jobs in this country? How do we work with the private sector to create jobs?

Another reason we need this bill is that it helps small businesses increase demand for their products and services. At a time of sluggish consumer spending, we need to be sure all American businesses--both big and small--have a chance to reach new customers abroad because when our companies are able to unlock new markets, they are also able to create new jobs.

Currently, the United States derives the smallest percentage of our GDP from exports compared to other major economies--the smallest percentage when we look at other economies across the world. As people in China, in India, and other countries gain more purchasing power, there is great potential for exports in this country because the people in these countries, in China and India, as they are gaining purchasing power, will become our potential customers.

More exports will mean more business, more jobs, and more growth for the American economy. So you can finally go in the store, look at the best good for the best price, and you can turn it over and it says ``Made in the USA.'' You can see that good on the shelves in China, and you can see it in India.

First and most obviously, exports allow a company to increase its sales and grow its business. Second, a diversified base of customers helps a business weather the economic ups and downs.

Currently, less than 1 percent of all American businesses export overseas. Of those that do, nearly 60 percent sell their products to only one foreign country, typically Canada or Mexico.

With 95 percent of potential customers outside our borders, and with the purchasing power they have increasing, it is clear the opportunities that lay in exporting for our businesses, large and small, are there.

But for many businesses, especially the small and medium-sized ones, the world looks like one of those ancient maps that contains only the outlines of the continent and a few coastline features, but the rest of it is a blank space of vast, unknown, and unexplored territory.

But do you know what. Thirty percent of our small and medium-sized businesses say they would like to export if they knew how, if they had the connections. In many situations, our small and medium-sized businesses have the products. They have the services. They simply cannot deal with the complexity of the international markets.

The overwhelming majority of businesses, even those that want to export, do not know about the export promotion services offered by our Federal agencies, and they do not know where to begin in order to make use of these services.

To help blunt the learning curve for these businesses, Senator LeMieux and I introduced legislation, which is included in this small business bill, to make sure companies have the capital and tools not only to continue exporting but to expand their reach to those 95 percent of customers who are located outside the borders of the United States.

If we really want to get out of this economic slump, we

have to look outside our borders. We have to look at the customers across the world.

First of all, this bill increases the activities and staffing of the Department of Commerce U.S. and Foreign Commercial Service Officers in carrying out their mission.

Secondly, it expands the Rural Export Initiative, which helps rural businesses develop international opportunities. Every $1 invested creates $213 in rural exports. That is a return on investment. It does so by helping businesses, to prepare them for profitable growth in global markets. It focuses on locating and targeting new markets, the mechanics of exporting, including shipping, documentation, and financing.

My State is now seventh in the country for Fortune 500 companies. But these companies did not start big. Medtronic started in a garage. 3M started as a sandpaper company in Two Harbors, MN. Target started as a dry goods store in the Nicollet Mall in Minneapolis, and they grew and they grew and they grew and a lot of how they grew was exporting their products, building new stores across the world, sending medical devices to places such as China and India.

Well, do you know what. It is a lot easier for big companies to do it because they have the staff to do it. It is a lot harder for small and medium-sized companies.

I saw success in our State, a little company in southern Minnesota, near Austin, MN, Akkerman Inc., named after Darryl Akkerman, who is there now--the son of the owner. He has been named ``the trenchless digger of the year'' in the United States. He has a product, and it is a big one. He puts big steel piping underground and pushes the piping through to do trenchless digging. Guess what. Countries such as China and India that have a lot of people on the surface of their land, they do not want to dig up big trenches. They want to do trenchless digging. In the middle of a cornfield he has grown from a few dozen employees to 77 employees, all because of exports.

Mattracks, the moose capital of Minnesota, Karlstad, MN, has grown from 5 employees to 50 employees simply by driving to Fargo, ND, and meeting with a woman named Heather who is with the Foreign Commercial Service Department, and finding out what potential customers they had from Turkey to Kazakhstan.

That is what we are talking about, exports. I am so proud the small business bill includes some major provisions, the bill Senator LeMieux and I introduced in Commerce. We got it through the committee, and it is now on the small business bill. It is going to make a world of difference so small businesses can access a world of opportunity.

Mr. President, I yield the floor and suggest the absence of a quorum.

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