I traveled to Cleveland, Ohio with President Obama and other Cabinet members today to help find ways to help small businesses drive growth and create jobs.
Since the beginning of this Administration, we have worked with Congress to put in place a set of strong incentives to support small businesses. The President has signed into law 17 different tax cuts for small businesses over the past two years including eliminating capital gains taxes on key small business investments and raising the amount small businesses can expense to $500,000, making it easier for small businesses to invest and hire. And as part of this broader effort we have worked to expand access to credit.
Capital and credit provide the oxygen small businesses need to grow, from tech start-ups in Silicon Valley to family-owned shops on Main Street. In 2009, we held a Small Business Financing Forum at Treasury with Karen Mills and the Small Business Administration. Small business owners from across America came to the conference and put fresh ideas on the table so we could develop innovative policy initiatives to unleash lending.
And in response to advice from small banks and entrepreneurs across the country, we worked with Congress to pass the Small Business Jobs Act. The President signed that Act into law last September, and today Treasury is implementing two new lending programs that were created under that law.
The first of these programs is the State Small Business Credit Initiative (SSBCI). This program, which is expected to spur more than $15 billion in small business lending, is already breathing new life into successful state lending enterprises that help credit-worthy small manufacturers and businesses obtain loans from the private sector. SSBCI funding has already been awarded to California, Michigan and North Carolina, which is expected to result in more than $3 billion in lending for these three states alone. And we expect to announce funding for other states soon.
Another program created by the Small Business Jobs Act is the Small Business Lending Fund (SBLF). A maximum of $30 billion has been authorized for this program, which encourages lending to small businesses by providing low cost capital to qualified local community banks with assets under $10 billion. We have received hundreds of applications requesting more than $4 billion in funds from Main Street banks across the country and we plan to announce the first round of SBLF awards in the coming weeks.
Given our current fiscal challenges and our commitment to fiscal responsibility, it’s important to point out that these two programs are not expected to add to our deficit. The law that created them made sure they were fully paid for.
The SSBCI and SBLF are off to a promising start, but we must continue to explore ways to expand access to capital. That is why, on March 22, we will host a conference at the Treasury Department to help reduce the challenges of raising capital at each stage of growth for a small business – from seed capital, to growth equity, to accessing the public markets.
America is rich in dynamic small businesses and Ohio is no exception. The government cannot create success, but it is our obligation to reduce the barriers that get in the way of success. Direct and open conversations between government and entrepreneurs about how we can together meet the challenges small businesses face are key to our success in these efforts and I look forward to continuing that conversation in DC next month.
Tim Geithner is Secretary of the Treasury.