Daily Local News: Gerlach Pairs with Castle to Give Small Business a Boost

Saturday, June 19, 2010

Gerlach pairs with Castle to give small business a boost

Proposed measure would reform loan programs

By GRETCHEN METZ, Staff Writer

U.S. Rep. James Gerlach, Pa-6th, of West Pikeland has joined U.S. Rep. Mike Castle of Delaware in introducing legislation to provide a boost to small businesses and create jobs.

The proposed measure, the Small Business Assistance and Relief Act, focuses on letting small business owners keep more of their money to hire workers, buy new equipment or expand their companies and spend less time filling out paperwork created by burdensome federal mandates.

In addition, the legislation would reform Small Business Administration loan programs to create new opportunities and establish a direct lending capital backstop program.

Such a measure is welcome news to county chamber and economic development groups.

Any legislation that would allow small businesses to be more profitable would be welcome, said Mike Grigalonis, chief operating officer at the Chester County Economic Development Council in Uwchlan.

"Growing small businesses will trigger economic growth," Grigalonis said. The proposed legislation "appears to be a good thing."

Grigalonis, who acknowledged he does not have an in-depth familiarity with the newly proposed legislation, said from his understanding of the bill that its "big components" would increase loan size and decrease taxes which he considers a substantial help to small businesses.

"The concept seems like a good one," Grigalonis said. "It seems like it would help small businesses grow."

Nancy P. Keefer, president and chief executive of the Chester County Chamber of Business & in

dustry, believes small businesses are the lifeblood of many communities and also supports the measure.

"Finding ways that government can incentivize businesses to grow and not penalize them with increased taxes and burdensome regulations will only contribute to a more successful business climate," Keefer said. "A majority of job growth occurs within the small business industry and this is a step in the right direction to return us to a stronger economy."

In Thursday's announcement, Gerlach said, "this legislation is based on the feedback I've been getting from small business owners throughout the district who are eager to create jobs and help turn our economy around."

The congressman went on to say there is tremendous uncertainty among small business owners about whether the leaders in Washington are going to allow tax rates to rise at the end of the year and whether additional regulation of banks, credit unions and other financial institutions will make tighten the credit markets even further.

"This bill aims to create some certainty for the business community so that companies can begin hiring workers and making other decisions to spur our economy," Gerlach said. "The only thing we have to show for trillion-dollar spending packages and other big-government gimmicks enacted during the last 18 months are record budget deficits that will hamper future generations of entrepreneurs and small business owners and stifle private investment."

Specifics of the proposed legislation include:

Keep Taxes Low

Extend the research and development tax credit.

Raise the new business start-up deduction from $20,000 per year from the current $5,000 per year.

Exclude 100 percent of the capital gains from the sale of certain small-business stock.

The IRS shall extend the following tax-relief provisions for small businesses until Dec. 31, 2011:

5-Year net operating loss carry back.

15-year recovery period for qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property.

Bonus/accelerated depreciation

Enhanced Section 179 expensing limits Reduce Regulatory Burden

Ensure any federal regulation does not require a small business to spend more than 200 man-hours annually on paperwork, applications, or petitions.

Require a Government Accountability Office Report on each federal regulation to determine the burden that such regulation imposes on small business concerns Ease Credit Crunch.

Increase loan size in the 7(a) program to $3 million from $2 million.

Create a direct lending Capital Backstop program.

Reform Small Business Administration procedures to encourage more participation by lenders.

Expand the Small Business Administration micro-loan program

To contact staff writer Gretchen Metz, send an e-mail to gmetz@dailylocal.com.

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