VOL. 125 | NO. 102 | Wednesday, May 26, 2010
Obama Focuses On Small Biz Job Creation
By Tom Wilemon
“I applaud the government for any step that they can do to help us get out of this hole.”– Dotty Summerfield, Chairwoman, Small Business Council, Greater Memphis Chamber
President Barack Obama Tuesday called for Congress to pass a Small Business Jobs Package that would set up a $30 billion lending fund and provide other initiatives for firms to expand and add jobs.
Owners of small businesses have complained that they have been left out of economic recovery programs while big banks and auto manufacturers have received billion-dollar bailouts.
Dotty Summerfield, who chairs the Small Business Council for the Greater Memphis Chamber, said the government should help business owners so they can expand and create jobs.
“I applaud the government for any step that they can do to help us get out of this hole,” Summerfield said. “Small businesses are what are going to put this country back on its feet again.”
The initiatives Obama called for included a new $30 billion fund to support lending by smaller, community-based banks and federal support for innovative state lending programs.
The initiatives included tax incentives such as a zero capital gains taxes on small-business investments.
The Small Business Administration would also be able to increase maximum loan sizes, expand access to commercial real estate financing and support loans for early stage companies.
President Obama stands with U.S. Small Business Administration Administrator Karen Mills Tuesday as he addresses small-business owners at the White House. Photo: Charles Dharapak/AP
Obama in a speech spoke about the difficulties small businesses have faced.
“From the middle of 2007 through the end of 2008, small businesses lost 2.4 million jobs,” Obama said. “And because banks shrunk from lending in the midst of the financial crisis, it’s been difficult for small-business owners to take out the loans they need to open up shop. For those who do own a small business, it’s been difficult to finance inventories, make payrolls or expand if things are going well.”
He said the legislation is intended to knock down those barriers.
Andre Fowlkes, executive director of Memphis Small Business Chamber, said members have been frustrated by the barriers and the government’s response.
“It seems as though President Obama has heard the complaints of small businesses, basically saying, if you go back to when he was first elected, that $700 billion or so economic recovery fund, what out of that was going to go to small business?” Fowlkes said. “There was not too much. It seems as though he has heard some of the complaints and has been working diligently to figure out ways to stimulate small business.”
The federal government did provide capital to small businesses through the SBA’s America’s Recovery Capital Loan program, but Tennessee banks have made fewer ARC loans than banks in other states.
Robert Staub, a small business coach, worries that the money from a new program won’t be made available.
“I’m a little leery of it,” Staub said. “It really depends on the requirements. I’m not opposed to direct funding from the SBA.”
Typically, SBA loans are channeled through private banks.