Rounds Introduces Bill Incentivizing Community Banks to Provide Credit to Small Businesses and Farms
WASHINGTON—U.S. Sen. Mike Rounds (R-S.D.), a member of the Senate Committee on Banking, Housing and Urban Affairs and the Senate Committee on Small Business and Entrepreneurship, today introduced the Access Business Credit Act of 2018. This legislation would incentivize community banks to provide loans to small businesses and farmers by excluding from a lender’s income interest earned on small business loans and loans secured by farm land.
“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. “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. 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. Fewer barriers to accessing credit can provide them with a much-needed boost.”
“Congress took a great step forward last year in promoting economic development by approving sweeping changes to the federal tax code,” said Curt Everson, President of the South Dakota Bankers Association. “South Dakota’s bankers applaud Senator Rounds for introducing the Access Business Credit Act, providing additional tax relief in support of lending by main street banks to their small business and farm customers.”
“This provision is a wonderful way to help small businesses in South Dakota stimulate growth and reinvest into our communities,” said Megan Olson, President and CEO of the Independent Community Bankers of South Dakota. “Small business and community banks have the exact same mission in mind, to see a successful main street. This helps to achieve that!”
Under this legislation, banks are allowed to deduct two types of qualified interest from their income, provided that neither type of interest exceeds $5 million. This includes interest incurred in the ordinary course of business of a small business and any interest secured by land used or held by a small business in conjunction with farming operations.
This legislation would benefit nearly every community bank in South Dakota and is supported by the South Dakota Bankers Association and the Independent Community Bankers of South Dakota. A companion bill has been introduced in the House by Rep. Rod Blum (R-Iowa).