Small busi­ness

The long-de­layed bill now heads to Obama. The wait for ac­tion was ag­o­niz­ing for own­ers who have been seek­ing loans.

Los Angeles Times - - Front Page - Lisa Mas­caro re­port­ing from washington Sharon Bern­stein re­port­ing from los an­ge­les

House gives fi­nal OK to a bill to pro­vide loans and cut taxes.

End­ing months of par­ti­san de­lay, the House gave fi­nal pas­sage Thurs­day to a small-busi­ness tax and lend­ing as­sis­tance bill, hand­ing Democrats a leg­isla­tive vic­tory on the eco­nomic is­sues cen­tral to the midterm elec­tions.

Pres­i­dent Obama had pressed Congress to pass the bill de­spite scant Repub­li­can sup­port, and small-busi­ness own­ers wel­comed his pledge to sign it into law Mon­day.

“The small-busi­ness jobs bill passed to­day will help pro­vide loans and cut taxes for mil­lions of small-busi­ness own­ers with­out adding a dime to our nation’s deficit,” Obama said. “Af­ter months of par­ti­san ob­struc­tion and need­less de­lay, I’m grate­ful that Democrats and a few Repub­li­cans came to­gether to sup­port this com­mon-sense plan to put Amer­i­cans back to work.”

The sum­mer-long wait for ac­tion was ag­o­niz­ing for small-busi­ness own­ers, many of whom have been seek­ing loans for months in the tight credit mar­ket.

The leg­is­la­tion has been closely watched in South­ern Cal­i­for­nia, where more than half the jobs are at small busi­nesses.

“It’s a re­ally, re­ally big deal,” said Scott Hauge, pres­i­dent of the ad­vo­cacy group Small Busi­ness Cal­i­for­nia. Hauge said the leg­is­la­tion would save many own­ers from fil­ing for bank­ruptcy by re­duc­ing tax bur­dens and mak­ing it eas­ier to ob­tain loans.

The bill be­gan with bi­par­ti­san in­ter­est be­cause both par­ties see small busi­nesses as vi­tal to the eco­nomic re­cov­ery. But Repub­li­cans op­posed a Demo­cratic move to add a $30-bil­lion small-busi­ness lend­ing fund, which GOP law­mak­ers com­pared to the 2008 bank bailout that pro­vided $700 bil­lion to cre­ate the Trou­bled As­set Re­lief Pro­gram.

The small-busi­ness bill passed Congress on largely

party-line votes.

Only one Repub­li­can, Rep. Wal­ter B. Jones of North Carolina, voted for the bill Thurs­day. In the Se­nate, two Repub­li­cans, Sen. Ge­orge LeMieux of Florida and Sen. Ge­orge V. Voinovich of Ohio, both of who are re­tir­ing this year, joined Democrats in pass­ing the bill last week.

The mea­sure was among the last re­main­ing leg­isla­tive ini­tia­tives in­tended to spur the strug­gling econ­omy as Congress pre­pares to ad­journ so mem­bers can cam­paign for the midterm elec­tions in Novem­ber.

The bill cre­ates the $30bil­lion lend­ing fund to help smaller banks make loans to busi­nesses, and of­fers $12 bil­lion in busi­ness tax breaks to en­cour­age in­vest­ment, en­trepreneur­ship and hir­ing. Democrats es­ti­mate that the leg­is­la­tion could cre­ate 500,000 jobs.

With the tax cuts, busi­nesses would be able to write off more of their costs of buy­ing equip­ment or mak­ing shop im­prove­ments. In­di­vid­u­als who are self-em­ployed could deduct health­care costs from the self-em­ploy­ment tax.

The bill would also con­tinue to waive Small Busi­ness Ad­min­is­tra­tion loan fees that had been set aside as part of the 2009 re­cov­ery pack­age.

The cost of the bill is off­set by clos­ing tax loop­holes and in­creas­ing tax-re­port­ing re­quire­ments and penal­ties.

The tax pro­vi­sions in the leg­is­la­tion would be par­tic­u­larly help­ful to small busi­nesses, Hauge of Small Busi­ness Cal­i­for­nia said. In Cal­i­for­nia, as many as 2 mil­lion sole pro­pri­etors — peo­ple who own the small­est busi­nesses — will save thou­sands in self-em­ploy­ment taxes that they pre­vi­ously had to pay on health in­surance premi­ums they paid for them­selves, he said.

Derek Ri­gaud, who is try­ing to buy a fran­chise of the chil­dren’s hair sa­lon Snip­pets, ap­plied for loans from five banks be­fore he was fi­nally ap­proved for a Small Busi­ness Ad­min­is­tra­tion loan from City Na­tional Bank of Los An­ge­les.

Thurs­day’s pas­sage of the small-busi­ness bill means he will save $4,400 in fees on the $195,000 loan, a bank spokes­woman said.

“The sav­ings will def­i­nitely help,” Ri­gaud said. “Any kind of sav­ings you can get will put more money into the busi­ness.”

Jim Wullschleger, who heads small-busi­ness lend­ing for City Na­tional Bank, said the mea­sure would al­low his in­sti­tu­tion and oth­ers to in­crease their lend­ing to small busi­nesses and spur the cre­ation of new jobs.

The long wait for ap­proval was frus­trat­ing, Wullschleger said. “It just put peo­ple into limbo.”

Kent Peter­son’s Long Beach com­pany, P2S En­gi­neer­ing, was ap­proved for a $1.2-mil­lion loan SBA to ren­o­vate its Long Beach head­quar­ters in April, be­fore funds for the loan pro­gram ran out.

With­out the ad­di­tional fund­ing ap­proved Thurs­day, the firm’s loan would have been cut sig­nif­i­cantly, Peter­son said, and the en­gi­neer­ing firm would have had to pay $35,000 more in fees.

The ren­o­va­tions, ini­tially sched­uled for last sum­mer but de­layed while Congress bick­ered about the bill, in­clude a gym for em­ploy­ees and en­ergy-ef­fi­cient light­ing.

“I’m very pleased,” Peter­son said. “Very pleased to the tune of $35,000.” lisa.mas­ sharon.bern­stein

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