On March 16, 2009 the President injected 17 billion dollars into the economy, calling it the Small Business Stimulus Package; giving the SBA the power to really help the entrepreneur and small business owners of the Nation. Treasury Secretary Tim Geithner: “Banks need to make extra effort to make sure that good loans are getting to creditworthy small businesses in order to serve the larger public good of moving this nation to recovery,” he said. “And given the role that many banks played in causing this crisis, you bear a special responsibility for helping for helping America get out of it.”
Seven months later, we still see very little improvement.
“If it’s one thing we’ve learned, it’s that here in America, we rise and fall together. Our economy as a whole can’t move ahead if small businesses and the middle class continue to fall behind.” President Obama said on October 19, 2009 at a small business event.
The address came only days after Obama announced a series of small business incentives geared towards loosening the flow of credit for entrepreneurs and small business owners.
“While credit may be more available for large businesses, too many small business owners are still struggling to get the credit they need,” Obama said. “These are the very taxpayers who stood by America’s banks in a crisis – and now it’s time for our banks to stand by creditworthy small businesses, and make the loans they need to open their doors, grow their operations, and create new jobs.”
Small business is the motor that keeps our economy running. While the market seems to be leveling off, unemployment rates continue to climb. “The problem: our small businesses have been some of the hardest hit by this recession. From the middle of 2007 through the end of 2008, small businesses lost 2.4 million jobs. And because banks shrunk from lending in the midst of the financial crisis, it has been difficult for entrepreneurs to take out the loans they need to start a business. For those who do own a small business, it’s been difficult to finance inventories, make payrolls, or expand if things are going well.”
The president recalled that his administration had already provided five billion dollars worth of tax relief to small businesses and guaranteed some of Small Business Administration loans up to 90 percent, which has supported nearly 13 billion dollars in new lending to more than 33,000 businesses.
But he argued that more needed to be done by private banks, particularly now that the situation in the financial sector has stabilized.
Obama said his administration would take “every appropriate step” to encourage the banking sector to resume lending to small businesses.
The government can continue to raise the amounts of money allocated to the Small Business Recovery and urge banks to be more active. However, what good can actually come of this effort?
- The funding is only being given to businesses that are creditworthy and more than 90% of the entrepreneurs and small business owners in our country do not know what creditworthy means. Nor do they know how to become creditworthy.
The mere acknowledgement of small business cannot be enough to get us out of this economic decline. What the government should be urging is for entrepreneurs and small business owners to get their businesses creditworthy and if they do not know how (which is more than likely) teach them how to get creditworthy.
There needs to be a call to arms… a call to action so to speak.
If you are an entrepreneur or small business owner I encourage you to take a step back from all of the new fangled ways of doing business, and get back to the basics.
- Take a look at your businesses from the ground up.
- Look at the very foundation your business is built on.
- Realize that is where you need to begin your quest on becoming creditworthy.
There are several resources and tools available for educational purposes as well as professionals who you can help take you through this process.
(Even I have written guides to becoming creditworthy; just take a look back at my archives.)