Legislation sponsored by state Rep. Mark Ouimet would help small businesses secure loans
State Rep. Mark Ouimet says Michigan small-business owners and entrepreneurs will have greater access to capital under legislation he's proposing.
"One of the biggest challenges that small-business owners face today is limited access to capital," Ouimet, a former banker, said in a statement. "New business owners and entrepreneurs looking to start a business can't create jobs if they are unable to secure a loan."
Mark Ouimet
Ouimet, R-Scio Township, is the primary sponsor of House Bill 4020, which was introduced and read for the first time last month.
It since has been referred to the House Committee on Banking and Financial Services for consideration.
The bill would allow the Michigan Economic Development Corp. to offer banks access to a consolidated lending account. Loans up to $750,000 would be offered.
To qualify, the loan must benefit a Michigan business with no more than 250 employees or $6 million in gross annual sales.
Ouimet said the bill would create a more effective version of the existing Capital Access Program, where each bank has its own earmarked reserve.
"It is vitally important to help small businesses because they create 64 percent of all new jobs in Michigan," said Ouimet, who represents western Washtenaw County. "This legislation also helps female entrepreneurs, who now start a large percentage of all new businesses."
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529.
Comments
Dale
Fri, Feb 18, 2011 : 2:24 a.m.
I actually read this legislation about two weeks ago and e-mailed Mark with some questions and have not received a reply. This is NOT just for small business. The provisions state "A loan under the small business capital access program may be issued to an eligible production company or film and digital media private equity fund EVEN IF THE ELIGIBLE PRODUCTION COMPANY OR FILM AND DIGITGAL MEDA PRIVATE EQUITY FUND IS NOT A SMALL BUSINESS." This is aimed squarely at the film indestrary and private equity funds which buy the stock of the productions. So here is what you have. A bill to guarantee banks 80% of there money back if they make loans and the loans are defaulted on. Who is on the hook for the 80%? You and I. If the risk to the lenders is mitigated then there is less diligence on there part. Not good for Michigan!! Check it out for your self here is the link. <a href="http://www.legislature.mi.gov/documents/2011-2012/billintroduced/House/htm/2011-HIB-4020.htm" rel='nofollow'>http://www.legislature.mi.gov/documents/2011-2012/billintroduced/House/htm/2011-HIB-4020.htm</a>
Chase Ingersoll
Thu, Feb 17, 2011 : 4:18 p.m.
I am not speaking regarding any official capacity for any of the several Washtenaw County Tea Party organizations, or for the Washtenaw County GOP of which I am an executive member. That being said, I can tell you that in these various organization we have members who perform "legislation watch" and HB 4020 was quickly identified by the legislation watchers as legislation that is counter to the principals of fiscal responsibility, free markets and limited government. YOU HAVE TO READ THE BILL, NOT JUST THE TITLE AND WHAT THE AUTHOR SAYS ABOUT IT !!! Specifically, the legislation watchers state: 1. This is the Michigan equivalent of the FDIC but only for Banks. It provides loan guarantees to financial institutions that provide commercial loans to qualified (read favored) businesses, PUBLIC AUTHORITIES, and LOCAL UNITS OF GOVERNMENT. Small businesses are used to garner sympathy for the bill but the reality is that it may be back door funding to local governments. 2. Retail business (read mom and pops stores) don't qualify. 3. The Michigan Strategic Fund. It creates a state program financed by taxpayers to bail out banks with Loan Guarantees. 4. The legislation also doles out specific provisions for up to 15,000,000.00 in loans to film and production companies. If I have presented incorrect facts, please challenge them with specific reference to the language of the bill. <a href="http://www.legislature.mi.gov/(S(cnosuj554zaxdibbnpdkavrm))/mileg.aspx?page=getobject&objectname=2011-hb-4020" rel='nofollow'>http://www.legislature.mi.gov/(S(cnosuj554zaxdibbnpdkavrm))/mileg.aspx?page=getobject&objectname=2011-hb-4020</a>
Do not taunt Happy Fun Ball
Thu, Feb 17, 2011 : 11:40 a.m.
A net Positive for Michigan. . Banks have the money, but they have really bad balance sheets right now (about 1,000 are on the official watch list across the US) . As long as these guarantees are not somehow swindled to cover loses from the Barney Frank Mortgage Catastrophe - Michigan will change for the better. . Small business is where all the hiring is at. . If Michigan can grow again - some of those long term loans will get back above water and the 'transfer of this bad debt' to the taxpayer may not happen. But if the government is involved - you can bet the taxpayer is being swindled.
David Briegel
Thu, Feb 17, 2011 : 12:29 a.m.
Wolverine, "So Be It!" Don't you get it? It is only "evil" when it is done to help real working people! Just more TeaPublican pork! Funded by woking people because we have to get that evil big govt off the back of business! This country will go nowhere until we "fix" the banking problem and the banksters!
Wolverine
Wed, Feb 16, 2011 : 11:23 p.m.
This legislation provides "loan guarantees" to lending institutions. It is basically a bailout for banks. The result will be that banks no longer put their due diligence into determining risks, resulting in a gl * Michigan taxpayers are on the hook for all losses because almost certainly the fund won't be fully funded. Taxpayer money will be raided to fund it. * Even if it were funded, it drains necessary capital out of small businesses (tacks on an extra 2% to the loan) which could be the difference between hiring another person. * It's a job killer.
Roadman
Wed, Feb 16, 2011 : 10:03 p.m.
Good work by Mark Ouimet!