President Barack Obama last week unveiled a host of initiatives aimed at encouraging job growth in the sector most responsive to economic recovery, small business. In speeches and Congressional testimony about the package, the White House message to small business is loud and clear: lead the way out of recession.
"Over the past 15 years, small businesses have created roughly 65 percent of new jobs in America. These are companies formed around kitchen tables and family meetings; formed when an entrepreneur takes a chance on a dream; formed when a worker decides it's time she became her own boss," Obama said in remarks to Maryland small business owners on Friday. "It's worth remembering every once in a while, a small business becomes a big business, and then changes the world."
The package aims to encourage hiring with a $5,000 tax credit for each new employee, to free up capital through $17.5 billion in additional small business loan guarantees, to increase those loan limits, to let firms refinance their commercial real estate loans under the Small Business Administration and to use funds from the Wall Street bailout so community banks can make more loans to small companies.
If you're a small business owner, what are the biggest problems facing you today? What do you think about the White House message to small business, and what would your response be?
In Senate testimony last week, Treasury Secretary Timothy Geithner said the fastest way to restore some of the 8 million jobs lost since December 2007 is to support small businesses, which are nimbler in hiring and expansion, and quicker to turn around when the economy improves.
"When you talk to small businesses across the country today they tell a similar story," Geithner said. "They talk about uncertainty about demand for their products. They say that their ability to expand and hire depends on better access to credit."
As a small business owner myself, I funded startup costs out of savings and turned profitable within a month. (There's very little overhead in writing.) I would love to hire someone but I'd need greater confidence than I have now that the additional cost would bring in at least as much additional revenue. There's not much I'd need a loan for, other than a snazzy new Web site, and again, I'd need a compelling financial incentive to spend the money.
What is your experience? Could you do more with your business if you had more cash on hand? Have you been turned down for a loan or had trouble accessing capital?
One concern of policymakers is putting the funding in the wrong area. For instance, what if they provide for additional loan guarantees through the Small Business Administration but banks refuse to make small business loans?
"It's great to have more money for guarantees, but if there are no loans the guarantee is meaningless," said Sen. Robert Menendez, a New Jersey Democrat, in an interview after a Senate Finance Committee hearing on the president's budget proposal.
What's your take on the issue? What policy initiative would help your business take off?