May 6, 2008
While the U.S. government is focused on keeping big banks and big business solvent in the tightening credit crunch, there has been little effort so far to help small businesses who face many of the same problems albeit on a smaller scale.
But one lawmaker says taken together, the health of all those small businesses is vital to the U.S. economy.
Sen. John Kerry (D-MA) has introduced legislation that has the goal of increasing lending to small businesses by reducing fees.
"The credit crunch has gotten even worse," Kerry said. "Over half of our banks have tightened their lending standards, making it harder for small businesses to expand their payrolls and invest in new equipment."
Kerry's Small Business Lending Stimulus Act would temporarily reduce fees on government-backed loans to small businesses.
At a hearing before the Committee on Small Business and Entrepreneurship, bankers and small businesses testified that reducing loan fees would be a big help in increasing loans to entrepreneurs.
Kerry said his bill would provide nearly $200 million to cut borrower and lender fees in the Small Business Administration's 7(a) loan program for working capital and the 504 loan program for financing fixed assets.
It would also provide $12 million for the microloan program and allow small firms to refinance business debts using the 504 loan program.
