IMPORTANT: If you are a small business owner, or an employee of a small business, you should know that the 2009 Economic Stimulus Act is giving $730 million to the Small Business Administration (SBA) to assist companies just like yours.
Small businesses are in trouble. Sales of their products have dwindled. Customers have hacked their budgets to a bare subsistence level, and even those with money are not buying.
So we called the SBA yesterday to inquire about the microloan program that was created under the Stimulus Act. It seemed like a good idea. They even have a link on their website to “Recovery Act 2009” that conjures visions of hope.
The gentleman I spoke with sounded odd, as if he had just walked away from a serious accident and was not entirely certain that all of his parts were still intact. When I explained why I was calling, his response was “Let me tell you a story.”
The gist of his tale was simple. I was not the first person who had called. He told me that construction companies had been calling for assistance, and all he could tell them was that they would be lucky if the loan program was in place by the end of this year’s construction season. Then he ended our conversation.
The Small Business Office of Advocacy tells us that over 99% of businesses in the U.S. are classified as small businesses, and that they employ close to 50% of employees on private payrolls. Significantly, 60-80% of new jobs are created by small businesses. When the recovery begins, small business is expected to generate the first wave of new jobs.
Fortunately, the Recovery Act did not forget small business. $730 million was allocated for aid to small businesses, including the microloan program that led to my telephone call. To put this sum in perspective, consider that AIG was given $150 billion in bailout funds under the Troubled Asset Relief Program (“TARP”) before you sat down to last year’s Thanksgiving turkey, and for an even broader perspective, compare small business’ $730 million bailout to the $700 billion in TARP funds allocated for the banking sector as a whole:
This is, of course, an absurdest discussion. How can we compare the bailout of the banking system to the rescue of over 99% of United States companies and nearly 50% of American jobs? Though we have had a difficult time accounting for where the TARP funds have gone and how they were used, we were assured by Secretary Paulson that this was the right thing to do. Never mind the rumors of concealed bonuses and taxpayer-fueled orgies of consumption at luxury resorts. The banks come first. At least they did until recently, when we began to hear calls to let banks gorged on toxic assets go under.
In the meantime, job losses escalate as more and more businesses succumb to the recession. Unemployment has surged to over 10% in some states.
Enough is enough. Our small businesses can’t wait for the end of construction season for their bailout.