Washington’s U.S. Senators Patty Murray and Maria Cantwell held a news conference this morning at Wallingford’s Tutta Bella pizzeria to talk up the small-business lending bill Democrats are trying to push through the Senate.
The Small Business Jobs Act would create a $30 billion fund for
community banks to lend to small businesses. It would also increase
limits on existing Small Business Administration (SBA) loans and give
small businesses additional federal tax breaks.
Supporters say the proposal, which passed the House in June, would free up credit frozen for many worthy small businesses.
But it has been blocked by a Senate Republican filibuster.
Republicans have called the measure “TARP light” — tapping public anger
over earlier Wall Street bailouts.
Cantwell and Murray were joined by
several Seattle business owners who related their stories of banks
abruptly refusing to okay loans — despite solid credit histories.
That’s stopped some of them from expanding their businesses and hiring
new employees.
Murray criticized Senate Republicans for blocking the measure,
accusing them of caring more about denying Democrats a legislative
victory than helping small businesses.
Back in 2008, when Republicans needed Democratic support to bail out
Wall Street, Murray said, they “rushed across the aisle.” Murray has
said she didn’t like voting for that unpopular financial bailout, but
thought it was the responsible thing to do given the financial calamity.
“We were told that Wall Street institutions like AIG and Goldman
Sachs were too big to fail and we came together to ensure that the
financial industry didn’t collapse,” Murray said.
“But now we hear that are that community banks and Main Street businesses are just too small to notice.”
Rossi has opposed the lending plan as just another bailout. He says
Congress should extend the Bush tax cuts and cut regulations if it wants
to help businesses.
“This is TARP-light; it’s just another taxpayer-funded slush fund for
banks,” Rossi said in a statement on the bill. “If Patty Murray really
wants to help small businesses create jobs, she should extend critical
tax relief and stop pushing through partisan, job-killing legislation
like the recently passed financial regulation bill which strangles
credit, making it nearly impossible for entrepreneurs to get small
business loans.”
The $30 billion lending fund would allow the U.S. Treasury Department
to purchase preferred stock in small banks with assets of less than $10
billion. The banks would repay the money at an interest rate that would
decline as their small-business loans increased — encouraging them not
to just sit on the cash.
The measure is supported by small business groups, including the National Federation of Independent Business and the National Small Business Association.
The business owners on hand Tuesday said they could expand and hire people if banks would start lending again.
Tutta Bella owner Joe Fugere said he went through a frustrating saga trying to get a loan to open a new restaurant in Issaquah.
Despite a good history with a Tacoma-based bank, Fugere said he was
denied a loan. Other large banks also rejected him, saying they didn’t
want to lend to “risky” businesses in a “risky” sectors like
restaurants.
“Honestly i was shocked and deeply offended. I had a healthy
profitable business, a blemish-free history of paying all of my loans on
time in full. And now I was being told that I was risky, when in fact
it really was their decisions on Wall Street that were risky and caused
this recession,” Fugere said.
Fugere said he was almost ready to give up on opening his new
location, but made a personal appeal in Dec. 2008 to the head of
Issaquah Community Bank (now called Bank of the Northwest). He got a
loan and successfully opened his new restaurant, which employs 75
people.
Others said they’re still struggling to get financing.
Hanna McElroy, owner of Magus Books
in the University District, said her bank cut off a line of credit
despite a history of business growth. She made up the difference with
personal credit cards – a debt that then kept her from getting
refinancing on her house.
“At this point I am extremely disappointed. I don’t have a lot of hope,” she said.
Murray and Cantwell said the bill will be taken up again once the Senate reconvenes in September.
– Seattle Times
