WASHINGTON – As the Senate prepares to consider small business jobs legislation this week, a new report by the U.S. Congress Joint Economic Committee (JEC) shows that lending to small businesses has declined in 2010, small business hiring remains flat and the smallest firms continue to reduce hiring.
“Small businesses have been struggling to get the loans they need to expand and create jobs, as this report shows. It has been almost three months since the House passed the small business lending bill and Senate Republicans have since dragged their feet and halted passage of this legislation for purely political reasons,” said Congresswoman Carolyn B. Maloney, Chair of the JEC. “I applaud Senator George Voinovich for stepping forward and agreeing to support the bill. It is time for Congress to help small businesses get the lending they so desperately need to grow.”
The report, entitled “Small Business Employment: Bank Lending Restrains Job Creation,” uses an unpublished data series from the Bureau of Labor Statistics to update a May 2010 JEC report analyzing small business hiring between January 2001 and March 2010. The update, which includes data through May 2010, shows that small business hiring has not started to increase, although larger and mid-sized firms continue to increase hiring.
Additionally, the report finds that the number of small business loans and the dollar value of these loans are both dropping. The number of loans made to small businesses, which peaked at 27.2 million in the second quarter of 2008, has fallen by over 4.8 million since then, a drop of 17.8 percent. The total value of those loans fell by $60 billion to approximately $650 billion.
Other JEC report findings:
The Joint Economic Committee, established under the Employment Act of 1946, was created by Congress to review economic conditions and to analyze the effectiveness of economic policy.