By U.S. Rep. Mike Michaud
(D-Maine)
Last year, Congress passed the Small Business Jobs Act, which is a bill that expanded much needed lending to millions of small businesses and provided tax incentives to help them grow and create jobs.
But when the House first considered it, I heard from the Finance Authority of Maine (FAME) that they were concerned some Maine programs might not qualify for the State Small Business Credit Initiative (SSBCI). This was a substantial problem, because SSBCI was a new program created in the bill that was going to provide $1.5 billion in funding to state lending programs, which use small amounts of public dollars to generate substantial private bank financing. The thought that Maine might not qualify was unacceptable, so I worked with FAME to fix the problem.
Luckily my colleagues in the House agreed with us. I was able to pass an amendment that ensured state-run venture capital programs are eligible to participate in the new program, like Maine’s Small Enterprise Growth Fund. The amendment also clarified that state financing programs like FAME, which also work with larger businesses, will be eligible for the new program’s funding as long as they use the new funding to lend to small firms.
Now, about one year later, these efforts have come full circle. On September 16th, the U.S. Treasury Department announced that it had approved a $13.2 million SSBCI allocation for Maine. This funding will be used to support the business development missions of Maine’s Small Enterprise Growth Fund, 14 regional economic development agencies, and FAME’s Economic Recovery Loan Program.
But the initial allocation is only the tip of the iceberg. The federal investment is expected to spur more than $132 million in small business lending in Maine overall. This is accomplished because states participating in SSBCI must demonstrate that a minimum of $10 in new private lending will result from every $1 in federal funding. The state-run programs do this by partnering with private lenders to increase the amount of credit available to small businesses.
Access to capital is an ongoing challenge for businesses throughout our state. In fact, it was one of the top issues I heard about during my recent tours of Maine manufacturers. Once put into our economy, this initial funding is going to leverage significant investments in Maine’s small businesses and help spur development and job creation at a time we need it most. I encourage Maine small businesses to reach out to FAME and see how this funding could help them accomplish their goals.
Passage of the Small Business Jobs Act shows what Congress can do when they put aside politics and pass commonsense policies that respond directly to the needs of the economy. But it’s not a silver bullet and hardly the end of the work we need to do to help small businesses.
To that end, I recently rolled out a plan aimed at providing our entrepreneurs with more of the resources they need to grow their businesses and hire new workers. This small business plan seeks to promote job growth by providing our businesses with increased access to capital through streamlined approval processes, lower interest rates on SBA loans, increased access to government contracts, and the opportunity to lock in long-term, stable financing.
This package of initiatives is designed to extend the help our businesses need to grow and hire new workers. They also have the added benefit of costing little to nothing to implement. It’s a proposal that I think a vast majority of Republicans and Democrats can get behind.
We need to foster a pro-growth environment that allows our small businesses to thrive. They created the vast majority of new jobs in our country over the past decade, and their success is critical to our economic recovery.
