One of the common themes I’ve been hearing lately from entrepreneurs is that we’re being ignored by Washington. A couple of newspapers today, the Orlando Sentinel and the New York Times, in separate stories, picked up on that same issue. First from Sara Clarke in the Sentinel:
While the nation's giant automakers take federal aid and financial behemoths apply for funds from the government's Troubled Assets Relief Program, the nation's small companies have had a lot of trouble getting even conventional loans.The economic-stimulus plan, which President Barack Obama is expected to sign Tuesday, could provide much-needed relief. But the impact of the $787 billion plan remains to be seen -- previous efforts to loosen small-business credit and spur the economy have had little effect.
More than 380 banks nationwide have already received federal funds from the controversial TARP fund, which has paid out more than $350 billion so far in an effort to counter the financial crisis and thaw the credit freeze. Among the payouts: $45 billion each to Bank of America and Citigroup, $40 billion to AIG, and $25 billion each to JP Morgan Chase and Wells Fargo.Those numbers underscore the yawning divide between Wall Street and Main Street, where businesses are usually looking for loans to buy "a truck and a lawn mower."Such small loans are hard to come by these days, even for well-established businesses, said Jan Mangos, an Orlando-based counselor with SCORE, a nonprofit group that offers free help to small businesses. "There is a lot of bad feeling out there," Mangos said, "particularly when you get people who have had a track record of success."
And then from Mickey Meese in the New York Times:
The $819 billion bill passed by the House last week and a similar measure under consideration in the Senate simply do not go far enough to bolster the small-business sector, owners and those who lobby on their behalf say. “Small businesses are a job engine for the economy,” said David French, vice president for government relations at the International Franchise Association. “Unfortunately,” he said, the stimulus package offers “a thimble-full of fuel for this engine.”
By his estimation, only 0.05 percent of the House bill is dedicated to small-business lending programs, and the Senate version is only slightly better. “It’s not a lot of money relative to the scale of the credit market problems,” Mr. French said.
While President Obama wants Congress to move quickly, Karen Kerrigan, president of the Small Business and Entrepreneurship Council, said more time should be spent examining other ideas. “I think more than expediency,” she said, “it has to be a good bill.”
“If small-business owners are to shoulder the responsibility for getting our nation back on sound economic footing,” Ms. Kerrigan said, “they need something from this package that will encourage them to invest, hire and prepare for growth.”