Senator Boxer: Helping Small Business Create Jobs
Friday, February 5, 2010
I am pleased to let you know of President Obama’s decision to create a $30 billion Small Business Lending Fund to assist community banks in extending credit to small businesses so they can create jobs and expand. I introduced a similar proposal last October with Senator Jeff Merkley to provide capital to community banks, with requirements that they lend to small business owners and individuals.
Small businesses generated 64 percent of the jobs created over the last 15 years, but many of our small businesses can’t get the loans they need to expand and create new jobs. The best way to help our small businesses is to increase lending through community banks. I applaud President Obama for building on the legislation that Senator Merkley and I introduced to restart lending to small businesses.
Our Bank on Our Communities Act (S.1822) established a framework similar to the President’s proposal to assist community banks in extending credit to small businesses and individuals to spur job growth. The President’s proposal would use $30 billion in existing TARP funds to lend to small and medium-sized banks on the condition that they devote the highest percentage of their lending to small businesses in their communities.
Currently, small businesses employ one half of the nation’s workforce. Fewer than one third of these businesses report that their credit needs are being met today. Fifty-nine percent of them now rely on credit cards to finance their daily operations, up from 44 percent at the end of 2008. Community banks hold less than $1 billion in assets and still made 48 percent of small business loans, despite the fact that they hold only 11 percent of national bank assets.
By assisting community banks in helping small business, new jobs will be created and our economy can continue to improve. This is an important step toward that goal.
U.S. Senator Barbara Boxer