Creating an environment for small businesses to grow is critical 10 creating jobs and reducing unemployment. Small businesses employ half of all private sector employees and are responsible for creating more than two thirds of all new jobs over the last decade. By serving as a platform for new ideas and investment, small businesses create thousands of new jobs that will be central to Michigan's economic recovery.
However, the recession and credit crunch has left far too many small businesses out of the credit markets, making it impossible for them to access loans. In many crises, companies have identified business opportunities or even secured purchase orders, yet still cannot find a bank that will loan them the money needed to scale up, pursue new opportunities, or even complete work under the contract.
I held meetings with banks and economic leaders across the region, and we found that local community banks and credit unions were more willing to make loans to small businesses based on longstanding relationships and a better understanding of the local economy, but they found it virtually impossible to raise the additional capital necessary to support increased lending. Picking up on an idea raised at a field hearing on the issue, I called on the president and Congress to take money that was being used for the Wall Street bailout and use ii to increase small business lending instead.
Out of our efforts to highlight this issue grew the Small Business Lending Fund Act of 2010, which was signed into law on Sept. 27, 2010. This new law allows small lenders to access and disburse capital from a small business lending fund that must eventually he paid back, with interest, $30 billion in government capital...