Jan Norman (OC Register) reports: "The benefits for small-business borrowers are a reduction in loan fees, higher guarantees in some cases and incentives to encourage the secondary market, which experts say is the real problem." But I am not impressed with the "solution." Of the $730 million the SBA is only allocating $375 million for these "benefits."
While SBA Administrator Darryl K. Hairston believes that this will "truly help small-business owners affected by the crunch," when I look at where the SBA is proposing to allocate the $730 million, I remain skeptical that the impact will be significant - especially for women-owned businesses:
- $20 million for technology systems to streamline the SBA’s lending and oversight
- $15 million to expand the SBA’s Surety Bond Guarantee program for builders (not much going to women there!)
- $25 million for jobs to meet new-program demands
- $10 million for the Office of Inspector General
$30 million will go towards expanding the SBA's microloan program. This may sound great on the surface because most of the microloans (loans less than $35,000) go to low-income individuals, minorities, and women, but the SBA has also said that some of this $30 million will actually go towards "technical assistance to help owners learn to run their businesses successfully." In other words, the SBA has not said how much of the $30 million is even going for loans.
The American Small Business League in Petaluma points out the American Recovery and Reinvestment Act does not require that any of the billions of dollars in contracts be awarded to America’s 26 million small businesses, and as for women and minority business owners, they will certainly get the smallest share of any small business contracts awarded.
Source: Jan Norman. OC Register. February 18, 2009.
