On September 23, the House of Representatives approved legislation (H.R. 5297) that would provide $30 billion in capital to community banks to expand small business lending. The Senate approved the measure on September 16. The President is expected to sign the bill into law.

The bill establishes a $30 billion lending funding, administered by the Treasury Department, to provide community banks with capital. The bill is designed to make it easier for small businesses to access capital.

Eligible small business lending activity includes loans made to businesses with annual revenues of no more than $50 million. Eligible loans include commercial or industrial loans; owner-occupied nonfarm, nonresidential real estate loans; loans to finance agricultural production; and loans secured by farmland.

The legislation extends through FY2013 the Small Business Administration’s (SBA) Floor Plan Financing Pilot program, which provides a 60-75 percent guarantee on credit lines of between $500,000 and $5 million for the financing of inventory, including manufactured homes. For more information on the program, click here.

The bill increases the maximum loan size for various loans under SBA’s 7(a) program and increases the federal guarantee from 75 percent to 90 percent.

The bill also includes $12 billion in tax incentives aimed at small businesses, including a renewal of the previously expired bonus-depreciation provision to allow companies to write off up to half the cost of new equipment placed in service in 2010.

Click here for more information on the legislation.

For more information, contact MHI Vice President of Government Affairs Jason Boehlert at 703-558-0660 or jboehlert@mfghome.org.