U.S. Sen. Mike Rounds (R-SD) on Feb. 6 introduced the Access Business Credit Act of 2018, a measure that would incentivize America’s Main Street community banks to extend capital to farms and businesses.
“By making it easier for community banks to provide capital, South Dakota’s small businesses will be able to focus on expanding, creating more jobs and investing in their communities,” Sen. Rounds said. “Additionally, family farmers and ranchers can focus on production and improving efficiencies during a time in which the farm economy has seen a significant downturn.”
The bill, S. 2378, is the Senate version of related legislation, H.R. 4424, introduced on Nov. 16, 2017 in the U.S. House of Representatives by U.S. Rep. Rod Blum (R-IA).
If enacted, S. 2378 would amend the federal tax code to grant lenders an exclusion from gross income for interest on certain small business loans, according to the bill’s text. This would spur community bank lending and consequently boost local economic growth, according to Rounds’ office.
“South Dakota’s community banks provide the capital that small business owners and family farmers rely on to grow their businesses and support jobs in cities and towns across our state,” said Rounds.
South Dakota executives in the banking industry have endorsed S. 2378, including Curt Everson, president of the South Dakota Bankers Association, who said the proposal would complement the steps Congress took last year in “approving sweeping changes to the federal tax code” by providing additional tax relief.
“This provision is a wonderful way to help small businesses in South Dakota stimulate growth and reinvest into our communities,” added Independent Community Bankers of South Dakota President and CEO Megan Olson. “Small business and community banks have the exact same mission in mind, to see a successful Main Street. This helps to achieve that.”
H.R. 4424 awaits consideration by the House Ways and Means Committee. The Senate version has been referred to the Senate Finance Committee for its consideration.