Bipartisan Legislation May Lead to More Business Loans

Bipartisan Legislation May Lead to More Business Loans
It seems Congress left behind a potentially valuable (at least to small businesses and political parties) piece of legislation when it recessed in early August, according to the Washington Post.

On July 25, Sen. Mary L. Landrieu, a Democrat from Louisiana and Chair of the Senate Committee on Small Business and Entrepreneurship, introduced the SUCCESS Act of 2012.

The SUCCESS Act hopes to extend several common tax breaks used by small firms, including the elimination of capital gains taxes on investments in small business equity.

If approved, the Act would double the existing deduction of start-up costs as well as reduce the time an S-Corporation is mandated to hold onto assets following a conversion from a C-Corporation. The tax relief provisions of the SUCCESS Act are estimated to deliver $12 billion dollars in tax cuts.

The Act also aims to ease restrictions on business loans insured by the Small Business Administration (SBA), and it would offer a one year extension of a provision that allows business owners to use SBA 504 business loans to refinance their commercial mortgages. This business loan refinancing would be instrumental in freeing up capital for struggling businesses to reinvest in their operations rather than their leases.

Despite being previously introduced as an amendment to the failed Small Business Jobs and Tax Relief Act, the SUCCESS Act has remarkably found bipartisan support—which is especially rare in an election year. The previously pitched amendment received 57 votes in the Senate—some of which were cast by Republican supporters.

It is fully possible—and even likely—that both parties desire to be seen as fighting for small business constituents who are a strong pillar in the national economy.

If the SUCCESS ACT succeeds, more than just entrepreneurs and small business owners will benefit. Freed capital and resources would be available for business expansion once business loans are borrowed. These extra funds would allow small businesses to expand and grow, which means more available jobs for Americans.

Cutting back on unemployment is the long desired stimulus needed to heal the economy as well as a political rallying point that can be turned on either party in this sensitive election year.