U.S. Sens. sponsor bill to boost small business lending
Detroit — U.S. Senators Debbie Stabenow and Gary Peters introduced legislation Friday that would provide an additional $26 million in federal loans to help small businesses in Michigan grow and create jobs.
The Small Business Access to Capital Act of 2015 builds on the pre-existing State Small Business Credit Initiative, which helps fund the Michigan Economic Development Corporation and other state-led lending programs.
Overall, the legislation would provide an additional $500 million in formula funds across the country. Michigan will receive more of that funding than any other state after Florida and California.
The bill also creates a new $1 billion pool of competitive funding for states that have already capitalized on funding from the 2010 program.
This is important because Michigan has exhausted nearly all SSBCI federal funding, loaning out more than $85 million to date, and creating a total of nearly $450 million in investment when including private capital. It has also led to the creation or retention of 9,000 jobs across the state, the senators said.
SSBCI was started in 2010 with the signing of the Small Business Jobs Act. Without the new legislation, the MEDC would run out of money in the fund by next year.
Stabenow and Peters announced the new legislation during a press conference at Eastern Market alongside Tammy Tedesco, owner of the Detroit catering company Edibles Rex. Tedesco was about to get a $1.8 million small business loan in 2013 to expand operations and hire new employees, thanks to the credit initiative.
Tedesco said when she sought a traditional loan from a bank, she could not convince them to make the investment on her own.
“It was very hard to convince people why they should invest in Detroit,” she said.
With the MEDC throwing its support and collateral behind the deal, the bank agreed to provide the loan.
Now Edibles Rex feeds nearly 7,000 kids daily in the Detroit area. Most of the 100 employees live in Detroit.
Tedesco plans to open a second location in the vacant Cattleman’s building in Eastern Market next summer.
“This is new legislation that builds on success,” said Peters. “It gets these funds to local agencies who can turn around and leverage it to help small business owners like Tammy.”
There’s no guarantee the bill will pass, but Stabenow said she feels confident it will find support.
“This was passed at a different time in 2010, when there was a democratic majority focused on helping small businesses,” said Stabenow. “Round one worked. Now we’re back for round two.”