On October 21, the President announced new measures that he claims will be part of an ongoing effort to help small businesses access credit and create jobs.   At the heart of the proposal is to have the government make more loans available to our small businesses. 

The three main components include: take further steps to provide small businesses with access to credit by supporting community bank lending through the Financial Stability Plan; seek legislation to increase maximum SBA loan sizes to allow more businesses to access the credit they need; and convening a Treasury-SBA Small Business Lending Conference to work with regulators, lenders and Congress to ensure credit is available to small business.  Do we really need more conversations on the issue?  Let’s get something done.

Access to credit is critical for many of our small businesses – as credit has tightened over the last year, many of our small businesses have felt the pinch.  But, if we have learned anything from Bailout Mania which has swept over Washington, DC, spreading around federal dollars and increasing government loans will do very little to actually stimulate our economy.  Instead we need policies that will have a positive, long-term impact on businesses and allow them to get more access to capital, reduce their overall costs and allow them to invest more in their employees and their business.  We need less government involvement, not more.

We have been arguing for a reduction (or elimination) of the payroll tax; allowing small businesses to cross state lines to purchase more affordable health insurance for their employees; elimination of the Alternative Minimum tax; and reducing federal mandates that cost time and money.

Long-term, free market solutions will do more to get our economy going and keep it going, than more federal handouts.  What do you think?

2 Responses to “President provides more access to credit for small business?”

1. Brian W. Says:
   October 22nd, 2009 at 10:30 am

   P.J. O’Rourke was correct when he said, “giving money and power to government is like giving whiskey and car keys to teenage boys.”

   It is a mistake to rely on the government to create capital for small business investment. The government doesn’t create capital – it regulates it, redistributes it, and taxes it. The most government can do is take capital from one person to give it to another.

   The best way to stimulate the economy, and actually create capital for small businesses, is to reduce the size and power of government and unleash the unique entrepreneurial spirit of the American small business owner. The government should get out of the way by cutting the payroll tax, allowing immediate business expensing and lowering taxes. Congress should quit its schizophrenic approach to tax policy and enact permanent tax cuts that are predictable and clearly understood. Small businesses crave certainty as they make decisions to hire workers or expand operations. Temporary economic policies (like stimulus bills and temporary tax credits) only serve to perpetuate recessions as small business owners wait to see what Congress is going to do from year to year.

2. Dona Storey Says:
   October 30th, 2009 at 6:45 am

   I am often hesitant in seeing easy or extended credit as the first answer to all small business problems. Most first time borrowers for small business loans actually think the SBA is lending them the money when in fact the loan is guaranteed by the SBA when a bank makes the loan to a small firm. In addition many people do not understand you go through the same lending analysis that is common in most banking institutions.I do agree that loans for temporary short term needs or lines of credit for inventory are necessary but too often small firms see living off of credit as an aceptable norm for exisiting. I support finding ways to faster profitability versus easier credit as a sensible startegy for growing small businesses, the financial engine of this country…not to even mention the real American Dream!I think we need to examine either a flat tax concept which truly levels the playing field or the lifting of many taxes applied to a firm within reasonably defined parameters. Those parameters can be gross sales or number of employess such as is already stated in the small business size standards and definitions as set by the SBA.

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