Is it just my imagination, or are people finally mentioning “small business” and “economic recovery” in the same breath?
It's about time.
For months now, we've heard about the economy as it relates to big banks, regulators, investors, government — just about everyone except small businesses. And that's a shame, because when consumers can't spend, when banks can't lend, when the system breaks down the way it has, small businesses feel as much pain as anyone.
Now, the Obama administration is focusing some of its recovery efforts on small businesses with a plan that encourages banks — even those that aren't receiving federal stimulus money — to lend more money to small businesses. The plan also would reduce lending fees for small businesses and increase the guarantee for some Small Business Administration loans.
In addition, the Treasury Department will use up to $15 billion to buy “small business loan securities” currently frozen on secondary markets. “By purchasing these securities,” the SBA states, “(Treasury) will unlock these secondary markets, and in turn, free up more capital to jumpstart lending for small business owners.”
“Across this country, tens of thousands of small business owners are finding it harder to get the credit necessary to stay in business,” Treasury Secretary Timothy Geithner said. “We need our nation's banks to go the extra mile in keeping credit lines in place on reasonable terms for viable businesses.”
“American small businesses are one of the strongest engines for economic prosperity in the world, and we can’t let this crisis continue to undermine their growth and potential,” acting SBA Administrator Darryl Hairston added in reaction to the plan.
With more than half of U.S. workers employed by small businesses, it's appropriate that the government's recovery efforts included something along these lines. But is it enough? Let us know what you think, then check out these related resources: