Three bills are working their way through Congress that can provide significant help for small businesses. Do you know what they all have in common? Welcome signs of bipartisan support for small business.
The first is the 504 Modernization and Small Manufacturer Enhancement Act of 2021. This bill, which passed the House in mid-April and is awaiting a Senate vote, is designed to make the Small Business Administration’s (SBA) 504 Loan Program more accessible to manufacturers through certified development company (CDC) intermediaries. The manufacturers would be able to apply for the funding – which can be as much as $6.5m – if they can show that funds will be used for energy efficiency or aid in the revitalization of a disaster area. The bill increases the loan amount available for small manufacturers and relaxes some collateral requirements, as well requiring the SBA to provide training.
Why is this bill important? Because it directs capital to manufacturers and leverages the underused CDCs. “Too many people are not as familiar with institutions like certified development companies,” says the Democratic representative Sharice Davids, a co-sponsor of the bill. “But they have a really great track record of servicing and helping small businesses who are either unbanked or underbanked.”
Next is the Opportunity Zone Extension Act. Sponsored by the Republican representative Tim Burchett, this bill was introduced in the House in February and awaits a vote. It extends for two years the election and capital gain deferral periods for qualified opportunity zones (defined as an economically distressed community where private investments, under certain conditions, may be eligible for capital gain tax incentives).
The bill incentivizes investments in small companies located in areas that need it the most. “If people don’t invest, the property falls into disrepair,” says Burchett. “But if there’s investment then jobs can be created, there’ll be more encouragement for further investments. I just think it’s a winning opportunity for our rural America and our inner-city America.”
Finally, there’s the Microloan Transparency and Accountability Act of 2021. Passed in the House in September 2020 and re-introduced this year, the bill establishes a 5% technical assistance grant for certain financing intermediaries, including intermediaries who make 25% of their loans to rural small businesses.
“It just really helps ensure that the Small Business Administration (SBA) gives rural small businesses access to micro loans,” Burchett, who also sponsors the bill, says. “I just don’t feel like people should be overlooked because of their location or maybe the color of their skin or the region that they grew up.”
The bill also requires the SBA to report certain metrics related to the disbursement of microloans to small businesses.
Yes, these bills all help small businesses – particularly small manufacturers, businesses in low to moderate income areas and rural companies – get more funding from the federal government. But there’s a bigger thing that these bills have in common: they’re very, very bipartisan.
For example, the 504 Modernization and Small Manufacturer Enhancement Act of 2021 is co-sponsored by five Republicans (including Burchett) and three Democrats. The Opportunity Zone Extension Act has nine Republicans and two Democrats signed on. The Microloan Transparency and Accountability Act of 2021 has three Republicans and two Democrats on board.
Unfortunately, these bills don’t get much media attention because they’re not headline-worthy. But for many small business owners, their passage could mean the difference between growth and stagnation, survival or demise.
So, yes, political infighting makes a juicy story. But behind the scenes, there are some issues that both parties can agree on and one of those issues is supporting small businesses.