Small businesses produce most of the new jobs in this country. They are the anchors of our Main Streets. They are part of the promise of America – the idea that if you’ve got a dream and you’re willing to work hard, you can succeed. That’s what leads a worker to leave a job to become her own boss. That’s what propels a basement inventor to sell a new product, or an amateur chef to open a restaurant.
Yet, along with the middle class, small businesses have borne the greatest brunt of this recession. They were hit by a one-two punch. The downturn has meant people are spending less, so there’s less demand. And the financial crisis made it difficult for small businesses to get loans.
So when I took office, I put in place an economic plan to help small businesses. And we were guided by a simple idea: Government can’t guarantee success, but it can knock down barriers to success, like the lack of affordable credit. Government can’t create jobs to replace the millions that we lost in the recession, but it can create the conditions for small businesses to hire more people, through steps like tax breaks.
That’s why we cut taxes for small businesses eight times. We passed a new tax credit for companies that hire unemployed workers. We also increased the exemption on capital gains taxes for key small business investments to 75 percent. We passed a tax cut so companies could immediately write off more expenses like new equipment. And as part of health reform, 4 million small business owners could be eligible this year for a health care tax credit.
Our economic plan has also helped to free up credit, supporting nearly 70,000 new loans to small businesses through expanded SBA lending. We also waived fees on Small businesses still face hardships, and it’s still too difficult for many creditworthy small business owners to get loans. So there is more we can do to help them grow and to help them hire. And that’s why I began fighting for months to pass this jobs bill – the most significant step on behalf of our small businesses in more than decade.
First, on top of the eight tax breaks we’ve already passed, we’re adding eight more, which will accelerate more than $55 billion in tax relief over the next year to businesses across the country. Capital gains taxes will be completely eliminated for key investments in small businesses – driving capital to as many as one million small firms across America.
Four and a half million small businesses and individuals will be eligible to immediately write off more expenses. Two million self-employed Americans will be able to receive a new deduction for health insurance. And we’re also increasing the tax break for anyone looking to open up a business. That’s a $10,000 deduction to help entrepreneurs afford what can often be pretty discouraging start-up costs, because our future prosperity in part depends on whether or not we are creating an environment in which folks can test new ideas, bring new products to market and generate new businesses.
The second thing this bill does is we’re going to make more loans available to small businesses. Right now, there is a waiting list for SBA loans more than 1,400 names long. These are people who are ready to hire and expand, who’ve been approved by their banks, but who’ve been waiting for this legislation to pass. When I sign this bill, their wait will be over.
We’re also more than doubling the size limits of the most popular SBA loans. Plus, through this bill, we’ll take other steps to promote lending. And this includes our new Small Business Lending Fund designed to help Main Street banks lend to Main Street small businesses across this country. And this bill will also encourage additional private sector lending through innovative efforts at the state level to promote small business and manufacturing.
So this law will do two big things: It’s going to cut taxes, and it’s going to make more loans available for small business. It’s a great victory for America’s entrepreneurs.
Now, I have to admit, I regret that this bill – which was based on ideas from both Democrats and Republicans, and drawing support from business groups that don’t normally support me – was blocked for months by the Republican minority in the Senate, and that needlessly delayed this relief. But I do want to thank the two Republican senators who bucked this partisanship to help pass this bill, and, obviously, I want to thank all the Democrats who worked so hard to get it passed.
Edited from remarks made Sept. 27 at a bill signing in the East Room of the White House.
