Back in may I did a piece entitled The New Jim Crow – Killing Small Business covering just a bit of the efforts by the Bushit Administration and conservatives to kill small business in America – particularly and specifically minority owned small business. Now I didn’t get into all the efforts to stymie and destroy minority owned business – but I discussed three specific actions-
- Cutting the Small Business Administration’s budget by nearly half. The SBA is the financial guarantor of only resort for many Minority owned businesses because of active redlining by commercial and merchant banks.
- Cutting financings of Minority and women owned businesses from 26% of total loans in 1998 to under 8% in 2007.
- Diverting over $800 billion in Minority and women Owned business contracts to the Big 6 Government contractors, often under false pretenses.
There is a lot more, in terms of how the 8(a) Program set up to give Disadvantaged and Minority Businesses was corrupted and rendered virtually dysfunctional The Bushit cut SBA staff and closed centers to help veterans set up small businesses – and utilized the Justice Department thwart Freedom of Information Act requests about contracting (You can’t bid or win a contract you don’t know about).
Meanwhile – the Bushit lied. What else is new?
President Obama promised to rebuild America, in large part by rebuilding Small Business in this country, So what’s he doing about it?
This for starters –
On June 15, the U.S. Small Business Administration, revitalized by President Obama, launched the ARC program, America’s Recovery Capital, giving banks and credit unions 100 percent guarantees so they’re taking no risk when they make loans of up to $35,000 to small businesses. The borrower pays no interest and makes no payments for 12 months, then has five years to repay the loan. SBA charges no fees and pays interest to the lender at prime plus 2 percent. So don’t let your lender say no; it has no excuse for denying one of these loans to a viable, established business.
Mandated by the American Recovery and Reinvestment Act, the stimulus bill, the ARC program is temporary, lasting only as long “as funding is available or until Sept. 30, 2010, whichever comes first,” warns SBA on its website, www.sba.gov. Click on ARC Loans or call the SBA Answer Desk at 1-800 U ASK SBA to learn all about it. Unlike most loan programs, ARC loans can be used to pay down existing debt, like those credit cards that charge 30 percent interest.
Now – unlike the conservatives, this isn’t set up just to benefit one group over another. It will however – be a much needed boost to those minority owned businesses who get up off their duffs and apply. It will also help majority owned small businesses.
In March – Treasury Secretary Geithner announced that Treasury will increase the reporting requirements on banks to tabulate the lending they offer to small business. The top 21 banks receiving federal funds will now be required to report their lending to small businesses on a monthly basis, and Geithner said he will push bank regulators to require the rest of the banking system to provide quarterly reports on small business lending. The hope is clearly that more public scrutiny of their records will lead to more lending; the threat, just as clearly, is that they will be made to do so if they don’t improve small business lending voluntarily.
“I want to deliver a clear message to our nation’s banks,” Geithner said before the President spoke. “The government of the United States has put in place extraordinary protections for the banking system … so that they have access to the liquidity they need. We need you to put that assistance to work for the American economy.”