The Small Business Jobs Act: Ensuring the Dominance of the American Economy

Forget healthcare reform. Forget financial regulatory reform. The most important piece of legislation to come to the plate in the past year is the Small Business Jobs Act. At a time when economic recovery seems uncertain, unemployment remains high, and American global might is in question, the Act is critical.

The Small Business Jobs Act will increase Small Business Administration (SBA) loan limits, create a Small Business Lending Fund (where the Treasury will invest in community banks with the condition that they lend to small businesses locally), establish the State Small Business Credit Access Fund (states will apply for grants to build small business programs, incubators and venture organizations), encourage investment in capital expenditures through tax incentives, and increase the tax deduction for start-up expenditures.

Whether or not all of the provisions in the Senate bill will become law, no one knows. Politics is a quirky beast. What is critical, is that lawmakers take the time to understand the longer-term ramifications of the bill.

Entrepreneurs have driven the American economy since its inception. Small businesses are the heartbeat of communities from Butte, Montana to Atlanta, Georgia. In order for the United States to continue to thrive in the global economy, small businesses need to be supported and given incentives to grow. College graduates need to be encouraged to take a risk on an idea. States need to support ventures at the local and regional level.

For expansion stage companies, these loans and tax incentives can make a considerable difference. Growth capital from the government in the form of affordable SBA loans and subsidized community bank loans can go a long way in both helping businesses to grow and optimizing their capital structure. 

The Act will serve as a supplement to smart institutional capital from the likes of our firm, OpenView Venture Partners. Affordable credit combined with knowledgeable growth investors is a winning combination for both individual companies and the American economy as a whole.