The $700 billion bailout of Wall Street left a bad taste in just about everyone’s mouth. And that bad taste is preventing movement on a proposal for a similar $30 billion rescue fund aimed at small businesses.
Three groups that supported the big bailout two years ago — U.S. Chamber of Commerce, the National Federation of Independent Business, and the National Association of Manufacturers — are mum on the small-business fund proposed by President Obama last year.
“The silence is leaving car-parts makers, franchise owners, and community bankers to fend for themselves in pushing for a small business lending fund,” Businessweek reports.
The plan would also ease terms on Small Business Administration-backed loans , offer $12 billion in tax breaks to small businesses, and issue grants that states could in turn use to make business loans. Senate Republicans blocked the measure in a 58-42 vote Thursday.
Meanwhile, lending to small businesses fell below $670 billion in the first quarter of 2010 compared to $710 billion in the first quarter of 2008, when a downward slide began. Federal officials say they don't know why, and business owners have been dipping into their personal retirement savings and relying on credit cards to get by.
Yesterday, the Los Angeles Times reported that small businesses around the country are paying up to 36 percent interest to borrow money from unconventional sources — including so-called "hard money lenders" — to make payroll.
Republicans sought more opportunity to make amendments to the proposed small business rescue fund, Bloomberg reported.
“This is the foremost issue in America, and we’re saying we don’t have time to address this issue?” Maine Republican Senator Olympia Snowe said prior to the vote. “Why don’t we spend more time talking with each other to get the policy right?”
Democratic Senate Majority Leader Harry Reid said he’d work with Republicans to try and find a compromise that would revive the legislation.