Obama and Geithner Announce Plan to Stimulate Small Business

Yesterday was a big one for the American small business community.  Facing declining sales and a tightening credit market, small business owners have struggled since Wall Street crashed in October.  While the Recovery Act and new federal budget provided some help to small business owners, they ultimately left both small business loan lenders and borrowers wanting more.

Realizing the importance small businesses play in the American economy - they account for up to 70% of the new jobs and are a vital source of market innovation - Obama and Geithner announced a big plan to stimulate the small business community.  What follows is an overview of the plan and how each action point facilitates small business stimulation.

Small Business Week in Review: 03/16/09

Economic News Roundup

AIG made considerable noise this past week.  The first point of content came from the company’s disclouse that it made mult-million dollar bonus payments to executives in the company’s financial products unit, the very until that caused the firm’s insolvency.  Angered and dissapointed by the news, The Huffington Post writes:

Recall that these bonuses are going to executives at AIG’s financial products division — the very unit that wrote trillions of dollars of “credit-default-swaps” that insured investors against defaults on bonds backed by sub-prime mortgages. The problem was that AIG used a loophole in the law to argue that the “credit-default-swaps” were not really insurance, so they weren’t required to abide by insurance laws which would have assured that they had the capital on hand to pay claims when defaults actually occurred. That caused AIG to collapse and helped precipitate the global financial crisis. Seven of these executives get from $3 to $6.5 million. So much for responsibility.

Small Business Week in Review: 03/09/09

Economic News Roundup

ADP Unemployment figures for February came in worse than expected at -697,000 versus the consensus figure of 630,000.  The numbers for Janaury were also revised downward from -522,000 to -614,000.  Job loss continues to accelerate.   Stories of job applicants were both disheartening and diconcerting.  A public school in Ohio received 700 applications for 1 janitorial position.

Evidence of the slumping economy is stacking up at an Ohio school which has nearly 700 applications for one open janitorial job…

…Superintendent John Richard says many applicants are laid-off workers with heart-wrenching stories about the tough economic times.

Forty-nine-year-old Donna Croston says she applied after losing jobs at two nearby factories that closed.

Obama’s budget and small businesses

President Obama’s budget proposal was announced today and made available on the web.  Here’s a breakdown of how Obama’s budget will affect small businesses via the Small Business Administration (pdf):

1. Provide $28 billion in loan guarantees to expand credit availability for small businesses

• $17.5 billion in guarantees under the Section 7(a) Guaranteed Loan program, which provides credit for small businesses
• $7.5 billion to provide Certified Development Companies financing to support commercial real estate development
• $3 billion for the Small Business Investment Company debenture program
• $25 million in Microloans - allows intermediaries to provide small loans and technical assistance to entrepreneurs and other start-up businesses.
• In line with the stimulus package, the Small Business and Community Bank Lending Initiative will expand small business credit availability

2. Supports disaster recovery for homeowners, renters and businesses

• $1.1 billion in direct disaster loans
• In 2010, the Small Business Agency will implement a pilot program of the Guaranteed Disaster Loan program

Small Business Week In Review: 01/12/2009

This week we are starting a new feature, the “Small Business Week In Review” on the smbZen BizJournal.  Tom and I are launching this feature to help the small business community identify and keep up with trends in the space.  Our goal is to give business owners (ourselves included!), the opportunity to reflect upon, discuss, and assess what’s happening.

If there are specific topics you would like us to include, or if you have blog post & story recommendations, please send a direct message to us on twitter.  To read the articles we will be featuring, follow us on twitter or visit our delicious page.  Without further ado -

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