As the economy continues on an uncertain path, recently we commemorated National Small Business Week and look to our nation's 27 million small businesses as the key to our economic recovery and restored job growth. In April, I held a series of small business roundtables throughout the state and heard about the challenges facing Maine small business owners and investors in today's economy. As Maine is home to almost 150,000 small businesses, it is critical that we ensure these firms have all the tools and resources necessary to lead us out of this downturn.
Currently, times are tough for our nation's small businesses. As the economy contracted 6.3 percent at the end of 2008 and 6.1 percent in the first quarter of 2009, it is no wonder that small businesses are struggling to access capital. Thus, we must design comprehensive and thoughtful initiatives to aid these entrepreneurs during this challenging period. As Ranking Member of the Senate Committee on Small Business and Entrepreneurship, I am focused on thawing frozen credit markets and increasing lending. Because when companies cannot access credit, jobs are lost and the economy suffers.
Congress and the White House have already taken a number of steps to loosen credit markets and abate this crisis. Specifically, in the American Recovery and Reinvestment Act, Small Business Committee Chair Mary Landrieu (D-La.) and I worked together to eliminate fees and increase guarantee rates to a maximum of 90 percent for the Small Business Administration's (SBA) flagship 7(a) and 504 loan programs. As a result, average weekly SBA loan volume has increased 25 percent since their implementation. This is a positive first step, but the Obama Administration and SBA must quickly implement the remaining small business provisions from the stimulus package to further this progress.
Luckily, SBA Administrator Karen Gordon Mills is dedicated to achieving these goals. Also a fellow Mainer, SBA Administrator Mills announced on Monday the official roll-out of the new Business Stabilization Loan program, otherwise known as the America's Recovery Capital (ARC) loan program, which will provide interest-free loans, up to $35,000, to companies having difficulties making loan payments. This program will act as a bridge for hundreds of small business owners that require only a small infusion of capital to stay afloat.
I am pleased that President Obama recognizes the credit crisis and has requested my views on helping ailing small businesses on several occasions. In March, he held a White House summit to address the concerns of the small business community. He used the occasion to announce that the Treasury will directly purchase, through the Troubled Asset Relief Program (TARP), up to $15 billion of SBA 7(a) and 504 loans. He also recently invited me to a private meeting in the Oval Office where I urged him to create a competitive lending platform at the SBA. Too often, potential SBA borrowers are stymied by the limited number of SBA lending options in the community. A lending platform that allows SBA lenders nationwide to “bid” on potential borrowers would increase potential SBA borrowers' access to SBA lenders and would increase the pool of applicants for banks.
President Obama also recently signed the much-heralded Credit Card Accountability, Responsibility, and Disclosure Act of 2009, a bill to protect consumers from abuses perpetrated by credit card companies. This legislation included my amendment creating a Small Business Security Task Force to safeguard small businesses from computer hackers and other security breaches. This Task Force will protect small businesses by creating a clearinghouse of information, resources, and tools that will ease the complexity, confusion, and cost often associated with enhancing online security measures.
During National Small Business Week we also honor outstanding small business owners across this country such as the two Mainers I met with who received national recognition for winning prestigious awards from the SBA. Mark A. Bancroft, President of Bancroft Contracting Corporation in South Paris, was acknowledged as the Maine Small Business Person of the Year. Mr. Bancroft is credited with revitalizing Bancroft Contracting Corporation following the downturn in the paper industry earlier this decade. His company is now in a strong financial position, having grown 19 percent over the last three years despite the difficult economic times. Donald Guimond, the Town Manager in Fort Kent, received the Phoenix Award for Outstanding Contributions to Disaster Recovery by a Public Official. During last year's disastrous flooding in Fort Kent, Mr. Guimond mobilized town employees to build temporary dikes and ordered mandatory evacuations, even personally going door-to-door to encourage reluctant citizens to leave.
Small businesses represent 99.7 percent of all employer firms nationwide. They generate two-thirds of net new jobs annually and create over half of our nation's nonfarm private gross domestic product. The entrepreneurial spirit is fundamental to our national identity and in order to regain economic strength and stability, we must provide assistance to our struggling small businesses. I hope you will join me in celebrating National Small Business Week every week of the year by reflecting on the countless contributions small businesses make to our nation and supporting local entrepreneurs.