Last February, I joined with my Senate Democrat colleagues in unveiling PA Works, a six-point proposal that is aimed at helping businesses create jobs, rebuilding the state’s aging infrastructure and energizing Pennsylvania’s economy.
Our plan will spur the creation of more than 28,000 jobs, leverage over $2 billion in new private investment, and will result in more than $150 million in general fund savings. We would accomplish this by focusing on six core areas—small business, workforce training, critical state investments, clean and green energy, infrastructure investment and tax fairness —eliminating duplications, getting rid of what doesn’t work and focusing on what does.
There were a number of bills in the package that can make a real impact on our business economy and our climate, but they were not considered in the budget process this year. That doesn’t mean that we’re giving up. We worked hard on this package and believe that these proposals can make a real impact that mean JOBS for our region and state.
For instance, I introduced Senate Bill 682 (SB 682) in March, which amends existing law that governs the Second Stage Loan Guarantee Program, under the Commonwealth Financing Authority. The Second Stage Loan Guarantee Program was created as part of an economic stimulus package passed by the legislature in 2004. It was intended to provide guarantees for loans to life science, advanced technology and manufacturing projects that were in their second to seventh year of development. While well intentioned, the program is vastly underutilized because of how the program was crafted.
SB 682 proposes that $50 million of the unused funding in the Second Stage Loan Guarantee Program be moved to create a Small Business Investment Guarantee Program. Eligible small businesses (100 employees or less) could obtain a guarantee of up to 100 percent of the principal amount of a loan (up to $2 million) with the intent that the guarantee would encourage lending in a tight credit market. The bill also extends the program to local government agencies that make loans—and all industry sectors may participate. By loosening the restrictions and refocusing the program, we can ensure that the funding originally allocated is not lying stagnant. A reconstituted $50 million Small Business Investment Guarantee Program would provide a needed catalyst to spur private banks and other commercial lenders to provide access to capital for small business.
It’s a proven fact that small businesses drive our economy—providing jobs for over half of the nation’s private workforce. Small businesses are also job creators. In every recession over the last three decades, it has been America's small businesses that stepped forward, began hiring and pulled the country out of the mire. There is a clear relationship between small business and the economy in general, especially in the United States, because much of economic growth is fueled by startup business. Small firms make a significant contribution to the economy simply by hiring one or two employees.
SB 682 will give those small businesses the opportunity to access funding, make the improvements and changes that they need to grow, and to continue making an impact on our economy. I hope to have the opportunity to debate and discuss it with my colleagues this fall.