Small businesses need help, according to Sen. Kristen Gillibrand, so today she announced a legislative package she believes will help small businesses start and grow.
Her plan would provide more federal grant money for business incubators, tax-free savings accounts for entrepreneurs and tax credits for investment in small businesses.
"The lack of early capital from the poor economy holds us (New York) back," said Gillibrand in a press release. "We need to support budding entrepreneurs, free up the credit they need to get their ideas off the ground, and invest in the kind of research we can turn into cutting-edge businesses and new jobs."
Gillibrand plans to introduce the Early-Stage Business Investment and Incubation Act, legislation to provide federal grants of up to $5 million for business incubators to support the development of early-stage small businesses in targeted, high-growth industries.
Another legislative proposal, Small Business Savings Account Act, would allow aspiring entrepreneurs to save up to $10,000 tax free to later invest in a new business.
Gillibrand also proposes making from $250,000 to $2.5 million available for clustered science-tech parks to help drive high-tech entrepreneurship and job creation.
Full press release after the jump:
Washington, D.C. – While small businesses serve as the economy’s biggest job creator, creating half of all new jobs across the state, they are struggling to grow in this tough economy. To help kick-start the backbone of our economy, U.S. Senator Kirsten Gillibrand today announced her entrepreneurship agenda to help generate access to the capital needed to start more small businesses, and create jobs for New York.
The focus of Senator Gillibrand’s plan is directing more early capital to business start-ups through federal grants for business incubators, tax-free savings accounts for entrepreneurs, and tax credits to leverage private investment in new businesses. Senator Gillibrand is also fighting for greater investments in New York’s science parks that have the ability to turn groundbreaking academic research into viable businesses that can create jobs and help grow our economy.
“My number-one focus is creating good-paying, family-supporting jobs,” Senator Gillibrand said. “But I know that government doesn’t create jobs – businesses do. New York is home to some of the world’s brightest minds and best ideas to grow our economy. But the lack of early capital from the poor economy holds us back. We need to support budding entrepreneurs, free up the credit they need to get their ideas off the ground, and invest in the kind of research we can turn into cutting-edge businesses and new jobs. This is the future of our economy, and we need to make sure it starts right here in New York.”
Small businesses are responsible for half of all private sector jobs and 70 percent of all new jobs created in the last decade. But nearly 60 percent of all small business report having trouble getting the credit they need – holding them back from growing, and creating new jobs.
February employment data from the New York State Department of Labor show that while more Americans are slowly going back to work, approximately 800,000 New Yorkers are still unemployed.
· Approximately 370,000 New York City residents are out of work, giving the region an average percent unemployment rate of 9.4%.
· Approximately 64,000 Western New York residents are out of work, giving the region an average percent unemployment rate of 9.5%.
· Approximately 52,000 Rochester/Finger Lakes Region residents are out of work, giving the region an average percent unemployment rate of 8.6%.
· Over 50,000 Central New York residents are out of work, giving the region an average percent unemployment rate of 9.6%
· Almost 25,000 Southern Tier residents are out of work, giving the region an average percent unemployment rate of 9.6%.
· Over 47,000 Capital Region residents are out of work, giving the region an average percent unemployment rate of 9.2%.
· Approximately 25,000 North Country residents are out of work, giving the region an average percent unemployment rate of 10.8%.
· Approximately 87,000 Hudson Valley residents are out of work, giving the region an average percent unemployment rate of 8.2%.
· Over 110,000 Long Island residents are out of work, giving the region an average percent unemployment rate of 7.7%.
Senator Gillibrand’s Entrepreneurship Agenda
1. Supporting Business Incubators that Fuel Entrepreneurship
One of the biggest obstacles for starting any new business is access to capital. As communities look for new ways to support local business development during tough economic times, increasingly more are looking to business incubators to help launch job creation engines. Currently there is a need for more federal mechanisms to support business incubators beyond “bricks and mortar” support.
Entrepreneurs need support as they work to move their ideas into viable, successful new businesses that create jobs, revitalize neighborhoods, and commercialize new technologies that can help grow our economy.
To support business incubators and foster growth among our high-tech entrepreneurs, Senator Gillibrand is introducing the Early-Stage Business Investment and Incubation Act, legislation to provide federal grants of up to $5 million for business incubators to support the development of early-stage small businesses in targeted, high-growth industries. Grants for incubators would go toward assisting start-up companies with comprehensive training and counseling services, investment management and purchased services.
Supporting entrepreneurs and business incubators is one of the best investments to rebuild areas of New York that were hit hardest by the economic crisis, and grow our high-tech sector.
· Every $10,000 invested in business incubators has the potential to create up to nearly 70 new local jobs, according to the Economic Development Administration (EDA).
· Every dollar devoted to an incubator generates approximately $30 in local tax revenue, according to the National Business Incubation Association (NBIA).
· In 2005 alone, business incubators supported more than 27,000 start-up companies that provided jobs for more than 100,000 workers – generating more than $17 billion in annual revenue, according to NBIA estimates.
2. Tax-Free Savings to Fund New Small Businesses
Entrepreneurs spend on average about $80,000 in first-year start-up costs. But since the economic crisis, with minimal access to capital, debt financing for new businesses has been increasingly difficult to obtain.
As part of her broad agenda to help entrepreneurs develop the start-up funds they need to get their new business ideas off the ground, Senator Gillibrand is co-sponsoring the Small Business Savings Account Act, legislation to allow prospective entrepreneurs to grow tax-free savings to fund their new small business.
The legislation would allow entrepreneurs to save up to $10,000 a year tax-free for their business. Once an individual decides to start their business, the funds from their savings could go toward equipment, facilities, marketing, legal fees, and other capital and operating expenses.
3. Tax Credits for Investments in Small Businesses
Private investment in new businesses helps fuel job creation, and helps entrepreneurs power through the common gap between the start-up of a company and the point it turns profitable. In 2008, companies backed by private investment employed more than 12 million people and generated nearly $3 trillion in revenue, accounting for 11 percent of private sector employment and representing about 21 percent of U.S. GDP. In 2009 alone, angel investments led to the creation of 250,000 new jobs. But since the economic crisis, private equity investment has dried up, holding entrepreneurs back from starting their businesses and growing our economy.
To leverage more private investment into budding entrepreneurs, Senator Gillibrand is co-sponsoring the American Opportunity Act, legislation to provide a 25 percent tax credit to encourage private investors to support emerging small businesses in fields with the most potential to lead in the high-tech economy, including advanced manufacturing, aerospace, biotechnology, clean energy and transportation.
Qualified small businesses could receive $2 million per year in tax credit-eligible cash equity investment, of which no more than $1 million may come from one single investor.
Estimates project the tax credit could spark $2 billion a year in private investments into new businesses.
4. Expand and Build New Science Parks
Science parks hold the potential to make major breakthroughs in academic research that translate to promising new business ventures and new jobs. New York is home to some of the nation’s best science parks, including at Clarkson University, the University at Buffalo, Binghamton University, the College of Nanoscale Science & Engineering at the University at Albany, New York University, Stony Brook University, as well as New York City’s Bioscience Initiative that brings together over a dozen world-class research institutions and business leaders to grow New York’s bioscience industry. Its state-of-the-art facilities and leading research has helped secure over $1 billion in federal investments from the National Institutes for Health (NIH) and create over 110,000 related jobs for New York City.
To give all of New York’s science parks the resources they need and build more science parks across America, Senator Gillibrand fought for and helped pass a provision in the America COMPETES Reauthorization Act that supports new business start-ups, generates student interest in science and technology, and promotes strong relationships between universities and high-tech industries.
Now, Senator Gillibrand is working to secure federal investments to support the growth of science parks. Specifically, Senator Gillibrand is writing to Senate leaders, urging them to include $107 million in the FY2012 budget to help grow America’s science parks.
5. Grow Regional Economies and Attract New Businesses
To grow the economy, businesses must work together and draw on regional strengths that can attract more investment to the area. To foster regional economic growth, Senator Gillibrand is working to pass the Strengthening Employment Clusters to Organize Regional Success (SECTORS) Act – legislation that would award competitive grants ranging from $250,000 to $2.5 million to eligible entities to develop cluster-based economic development strategies.
These investments are critical to connecting regional businesses, suppliers, research and development entities, education and training providers, and associated institutions in a particular field to fulfill regional workforce needs and grow regional economies.
From Eastern New York’s Tech Valley to Western New York’s biotech corridor, to New York City’s Bioscience Initiative, the SECTORS Act would provide critical federal investments to some of New York’s most promising regional cluster development projects, and lay the foundation for our state’s long term economic strength in the high-tech sector.
Would us mom and pop
Would us mom and pop businesses benefit from this? I see a lot of science driven funding and targeted high growth industries funding. What about the hardware stores and restaurants and bookstores that local entrepreneurs want to open?
She should just propose
She should just propose legislation that would give everyone a printing press so they could print their own money. It's what they do for Wall Street. Everyone could be billionaires then. Start-ups would have all the money they need.
Politicians have been trying to use government to create jobs for as long as I can remember and the jobs just seem to keep on leaving. As long as voters keep buying this nonsense, the politicians will keep on selling it.