A year after the government bailed out the big banks, the big automakers and one very big insurance company, the Obama administration seems to have finally gotten around to helping small business.
In his weekly address on Saturday, the president shined the spotlight on small business owners and their struggle to get the credit they need to help get their businesses back on their feet.
“These are the very taxpayers who stood by America’s banks in a crisis,” Obama said, “and now it’s time for our banks to stand by creditworthy small businesses and make the loans they need to open their doors, grow their operations and create new jobs.”
Unfortunately, that’s easier said than done. It was one thing for the government to buy up stacks of bad debt and pump billions of dollars of liquidity into the financial system. It’s quite another to persuade a bank to lend money to a small business that, even in good times, may have a tough time making a go of it.
That’s why it’s going to take more than browbeating banks and super-sizing SBA loans to get America’s small businesses off the respirator and out of the emergency room. It’s going to take revenue–sales generated by customers armed with paychecks, credit cards and home-equity credit lines who feel confident enough to start buying again. But with gun-shy banks and credit-card companies cutting consumer credit to the bone, small businesses are going to have a tough time making sales to customers who have to dig into their wallets and come up with cash. And with double-digit unemployment predicted to continue for many years to come, paychecks will also be in short supply.
What’s the answer? Well, I’d like to think that the government might be willing to give the credit-card companies a run for their money and offer zero-percent financing to people who patronize dog walkers, landscapers and other home-based businesses. It might also be nice to see the feds guarantee trade credit issued by small businesses to their corporate customers–though that isn’t likely to happen, either.
While consumers’ access to credit will improve as the economy begins to recover, it’s going to be a long time before shoppers start partying like it’s 2007.
And what about the startups, the “dreamers,” as Obama called them in his speech? Well, they’ll turn to friends and family to help them launch their businesses just as they always have. Because, even though I share Obama’s view that “all things are possible for all people and [that] we’re limited only by the size of our dreams and our willingness to work for them,” I also know from experience that every entrepreneur succeeds or fails on his or her own.
This entry was posted on Monday, October 26th, 2009 at 9:28 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.Leave a Reply
