America’s small businesses are the backbone of our economy.  The nation’s 27 million small businesses sustain more than half of all the nation’s private sector jobs and have generated 64 percent of new jobs over the last 15 years.  With an incredible entrepreneurial spirit, American small business owners continue to drive innovation that will help lead our nation’s economic revival, increase our competitiveness in the world economy, and create new jobs.  Senator Boxer is leading efforts to advance policies that will help grow our vital small business economy.  

Senator Boxer’s Four-Point Plan for Small Business Success

Speed Access to Credit

• The Bank On Our Communities Act (S. 1822, Merkley-Boxer):
  Less than one-third of small businesses report that their credit needs are being met.  Bank loans to small businesses have dropped more than 8 percent over the past year – almost three times the rate of decline in personal and real estate loans.  We must work to speed credit to small businesses so that they can create jobs and grow the economy.  The Bank on Our Communities Act will allocate existing Troubled Asset Relief Program (TARP) funds to viable community banks on the condition that they restart the flow of lending to small businesses.  This will help community banks raise private capital and increase their lending to small businesses and consumers.

• The Small Business to Capital Act (S. 1832, Landrieu-Boxer, et al.):
  Ensuring that small businesses have greater access to capital is an essential step on the road to economic recovery.  Small business owners continue to struggle to get loans to finance their operations or grow their businesses, and current Small Business Administration (SBA) loan limits often fail to meet the needs of small businesses in California.  The Small Business to Capital Act will increase the maximum size of various SBA loans, so that more small business owners can access lending programs. 

Health Care Affordability and Access

• Lacking the bargaining power of large firms, small businesses pay as much as 18 percent more for the same health insurance.  Entrepreneurs and small business employees are nearly three times as likely to be uninsured as their counterparts in large firms.  Health care reform legislation currently being debated in Congress will help small business owners in California by providing tax credits to small businesses that purchase health insurance for their employees and offering the option of purchasing quality, affordable insurance through an exchange.   

Small Business Job Creation

• American Recovery and Reinvestment Act (H.R. 1, P.L. 111-5): 
  To date, the Recovery Act has supported nearly 65,000 loans for a total of $13 billion in small business lending authority to help business owners create jobs and grow their operations.  In California, Recovery Act funding has supported 4,712 small business loans worth $2.2 billion in lending authority.  In the Bay Area, Recovery Act funding has supported 809 small business loans worth $461 million in lending authority.  Small businesses have also accessed $5 billion in Recovery Act tax relief provisions.  Senator Boxer also held a Recovery Act hearing in Oakland on August 14, 2009 to examine small business participation in grant and contracting programs, and her staff held two Recovery Act grant workshops for small businesses.   
    
• Economic Development Administration (EDA) Reauthorization Bill
  The EDA provides federal resources to meet the economic development needs of distressed communities throughout our nation.  According to the EDA, between 2004 and 2008 “the agency will have helped America’s rural and urban communities create over 389,000 higher-skilled, higher-wage jobs at an average cost of $2,600 per job.”  Not only is EDA providing federal funding that creates jobs, but these federal dollars spur large amounts of private sector investment.  For every $1 in federal funding EDA has invested in communities, about $31 in private sector investment is created.  Senator Boxer will soon introduce a bill to reauthorize and revitalize the EDA. 

Promote Tax Incentives and Reduce Red Tape

• The Home Office Deduction Simplification Act (S. 1754, Boxer-Bayh):
  Nearly half of all small businesses are home-based, and home-based businesses contribute $314 billion to the U.S. economy each year.  Current law provides home-based businesses with a deduction for expenses related to an office in the home under limited circumstances, but the process for claiming the deduction is so complex and burdensome that the National Small Business Association estimates only 25 percent of eligible taxpayers claim the deduction.  Senator Boxer’s bill would provide immediate tax relief to the millions of home-based small business owners that are driving innovation and creating jobs by establishing a standard home office deduction option of $1,500.

• The Small Business Jump Start Act (S. 1402, Merkley-Boxer):
  Studies show that small business formation increases during periods of high unemployment, and over the last fifteen years small businesses have generated 64 percent of new jobs.  Yet for the majority of small business owners, the first year is the toughest.  New entrepreneurs must hire employees, attract clients, start up administrative systems, and find a suitable facility.  This legislation will increase the small business start-up expenses deduction from $5,000 to $10,000 and increase the threshold for the deduction phase-out from $50,000 to $60,000. 

• Net Operating Loss Carry-back Act (S. 823, Snowe-Boxer, et al.):
  The Recovery Act included a provision allowing qualifying firms to offset current losses with prior taxes paid in either 2008 or 2009, a tax process referred to as Net Operating Loss Carry-back.  This bill would extend the carry-back window from two years to five years, allowing more firms to receive the stimulus benefit.