Office of the CEO

Entrex Inc.

48th Floor

311 South Wacker

Chicago, IL 60606

 

November 30, 2009

 

President Barack Obama

The White House

1600 Pennsylvania Avenue NW

Washington,  DC 20500

 

RE:   “Economic and Employment Growth Initiatives”

 

Dear President Obama,

 

Thank you for the recent opportunity to greet each other at the White House on October 29^th.

As you may recall;  American investors desire to invest in the private companies across America!  Yet there are a few small opposing provisions of regulatory framework which limit the potential flow of capital to fuel employment growth.  Without compromise to public interest, or the outlay of further capital by the Federal or State governments, the removal of a these regulatory barriers could refuel employment growth by restoring capital flow to companies.  

United States Congressman Mark Schauer, from the State of Michigan, recently was cited on National Public Radio as “one of the most innovative Congressmen focused on Economic and Employment growth”.  Congressman Schauer’s team is focusing on some practical initiatives that address regulatory barriers to capital flows into companies.  These initiatives include:

1.            Government Guarantee of Government Receivables for Private Business:  Contracts related to the American Recovery and Reinvestment Act typically cause increased working capital needs for the companies associated with the contracts.   Ironically, the banks who historically lend to these companies, including those banks that are “to big to fail”, exclude Government receivables from their collateral calculations when determining how much they can lend. Congressman Schauer’s initiatives propose the SBA guarantee Federal and State government payments to banks; in-turn providing the additional capital and associated payroll funding needs to these companies. 

2.              “Small Investors for Small Business”: A small adjustment to one of the exemptions of Investment Company Act of 1940 would allow the SBA’s Small Business Investment Corporations to increase the number of private investors from the current 99 to 499 investors, similar to other private companies, before having to register with the SEC.  This change would allow “smaller” but accredited investors to invest into SBICs and allow increased capital flow into American private companies to fuel employment growth.

These small regulatory adjustments represent an immediate opportunity to infuse American private companies with desperately needed growth capital and open the door to associated national employment growth that is slowing economic recovery -- without further capital outlay by the Federal or State governments! 

The American people, nor elected officials, cannot wait any longer for results of ARRA to “hit the streets”.  With your support, the initiatives by Congressman Schauer deserve careful consideration and quick implementation.  If there is anything I can do to help, please let me know.

Stephen H. Watkins

Chairman and CEO

Entrex, Inc.