Small businesses are the lifeblood of our communities and economy. There are over 24 million small businesses in the U.S., and over two million in New York. Small businesses represent over 99 percent of all employer firms, employ half of all private sector employees, pay 45 percent of total U.S. private payroll, and have generated 60 to 80 percent of net new jobs annually since the mid-1990s.
In fact, more than half of all Americans either own or work for a small business, creating two out of every three jobs. In addition, small businesses have been a source of tremendous innovation and employ 41 percent of the high-tech workforce.
Congresswoman Lowey is committed to improving the competitive position of small businesses through:
- Targeted relief of tax burdens and health care costs;
- Increasing access to affordable capital and technical assistance; and
- Protecting small businesses from unfair credit practices.
Lowey voted for tax cuts to help small businesses grow and create jobs. The Small Business Jobs and Credit Act, which Lowey supported, is providing over $12 billion in tax cuts to increase small business investments and create jobs, including:
- A 100 percent exclusion of capital gains taxes for investments in small businesses held over five years;
- Temporary doubling of the tax deduction for start-up expenditures, up to $10,000, to create new small businesses;
- Greater expensing and extended bonus depreciation so small business owners have additional capital to grow; and
- Deductions of health care payments for payroll tax purposes.
Congresswoman Lowey also voted for:
- The HIRE Act, which provides a 6.2 percent payroll tax holiday for hiring previously unemployed workers and a $1,000 tax credit for retaining those employees for a year;
- The Work Opportunity Tax Credit (WOTC), which allows employers to receive tax credits for hiring employees from specific groups such as veterans and high-risk youth; and
- Tax relief for small businesses that purchase capital equipment.
Helping Small Business Expand and Create Jobs
Congresswoman Lowey successfully passed provisions of the Small Business Job Creation and Access to Capital Act in 2010 as part of the Small Business Jobs and Credit Act. Her measure increased SBA 7(a) and 504 loan guarantees, which is critical for business owners in high cost-of-living areas like ours.
SBA loans have been used to grow small businesses in the New York 17th District, including a flooring company in Elmsford, restaurants in Pelham and White Plains, construction companies in Tuckahoe, an accounting firm in Port Chester, and Elevation Burger franchises throughout Westchester County.
Congresswoman Lowey also supported the $30 billion Small Business Lending Fund which will leverage up to $300 billion in private capital for healthy small and community banks to lend to qualified small businesses. Increased lending will allow small businesses to purchase the equipment, inventory and property to expand and create jobs.
Small Business Administration Loans
The SBA provides a guarantee to banks and lenders for the money they lend to small business owners. When a business applies for an SBA loan, it is actually applying for a commercial loan through a bank or authorized SBA lender, structured according to SBA requirements with an SBA guarantee. The SBA reduces some of the risk associated with lending money to business owners and entrepreneurs who may not qualify for traditional loans.
The following types of loans are available:
General Small Business Loans: 7(a)
- The SBA’s most common loan program for helping start-up and existing small businesses with financing for a variety of general business purposes.
- 7(a) loans provide long-term working capital to pay operational expenses as well as short-term working capital.
- This general loan can be used to purchase equipment, machinery, or even real estate.
- Provides loans up to $50,000 to help small businesses and certain not-for-profit childcare centers to help start up and expand.
- Funds are provided to specific intermediary lenders, which are nonprofit community-based organizations with experience in lending and management assistance.
- SBA disaster loans can be used to repair or replace real estate, personal property, machinery and equipment, and inventory and business assets that have been damaged or destroyed in a declared disaster.
Real Estate and Equipment Loans: CDC/504 Loans
- Provides financing for major fixed assets like equipment or real estate.
- A 504 loan can be used for the purchase of land, the purchase of improvements like landscaping or parking lots, the construction of new facilities, or the purchase of long-term machinery and equipment.
A quick and useful tool to find out if one of these loans might be right for you can be found at: Business.USA.gov/access-financing#.
Protecting Small Businesses from Deceptive Credit and Lending
Congresswoman Lowey was a proud cosponsor of the Credit Cardholders Bill of Rights, which protects individuals from arbitrary, unfair, and anti-competitive credit card practices. She is working in Congress to extend equivalent protections to small businesses, many of which rely on credit cards to purchase inventory, and to meet capital needs.
The Small Business Credit Card Act, which Lowey authored, would:
- Require advance notification before interest rate hikes;
- Eliminate unnecessary fees, interest charged on debt paid on time, and “universal default” penalties;
- Require credit card companies to apply a payment over the minimum to the balance with the highest interest rate; and
- Prohibit interest rate changes in the first year of the account.
Federal Contracting for Small Businesses
Congresswoman Lowey is working to remove hurdles that prevent small businesses from fairly competing for federal contracts.
For more information on Federal Grants and Contracting, please click here to visit Rep. Lowey’s Constituent Services page.