By Larry Jones
October 4, 2010

President Barack Obama signed into law the Small Business Jobs and Credit Act of 2010 before a crowd of small business owners, mayors and key congressional leaders during a September 27 White House ceremony. Mayors attending the event included Columbus (OH) Michael B. Coleman, Racine (WI) Mayor John Dickert, Charlotte (NC) Mayor Anthony Foxx, Allentown (PA) Mayor Ed Pawlowski and Pittsburgh Mayor Luke Ravenstahl.

The bill sets up a $30 billion lending fund to improve small business access to credit, and provides $12 billion in tax cuts to encourage small business growth. When fully implemented, the new law is expected to create 500,000 new small business jobs in local communities across the nation.

Passage of the legislation was a high priority of the Conference of Mayors. Commenting on the legislation, Conference of Mayors President Burnsville Mayor Elizabeth B. Kautz said, “We are very pleased that the Administration and Congress worked together to pass this bill before going home for the October recess. Since small businesses provide the vast majority of jobs in our local communities, it is critically important that they receive the support they need to continue creating those jobs to help put our unemployed people back to work.”

Under the new law, the lending fund will be used to make loans to community banks with less than $10 billion in assets that provide loans to small businesses. As an incentive to get them to increase loans to small business, the interest rate that banks must pay back to the fund will be reduced to as low as 1 percent if banks increase the number of loans to small businesses by ten percent over last year's level.

Tax cuts will also be increased to encourage small business growth. These include deductions that will allow small business owners to write off half the cost of certain equipment purchases in 2010, and the full cost of health insurance for themselves and family members. A more detailed fact sheet on the new law appears to the right of this story. (Please box SBA Fact Sheet on Small Business Act of 2010)

In closing, President Obama said, “At this difficult time in our country, it's essential that we keep up the fight for every job, for every new business, for every opportunity to strengthen this economy. …That's what's being done by the mayors who are here today, who are fighting day-in, day-out, to help start new businesses that can bring prosperity to their communities.” Mayors are urged to partner with SBA officials in their regions to begin educating small business owners and community banks about the assistance available under this legislation.