Let’s face it: The vitality of the economy impacts all businesses, but none so directly as that of small businesses. So when the Bush and Obama administrations offered shiny golden bars in the form of taxpayer loans to help out large businesses, including the big banks, they forgot that small businesses are the ones that would provide the real spark to get the economy moving again and the ones that could be providing the real job growth.
Unfortunately, that mega help to those large businesses didn’t really flow down to the small businesses as anticipated and therein would lie the problem. So even though small businesses didn’t initially get any of those huge golden bars from TARP, it did finally receive some deserving golden nuggets.
President Obama has finally gotten the message and understands. Starting with pushing through the Small Business Jobs and Credit Act last year as a down payment in making small businesses an active part of the economic recovery, we have an administration that is paying attention to small business and I believe it has made a difference.
The law allows for an increase in both the size and number of loans to small businesses from the U.S. Small Business Administration (SBA). In fact, SBA has increased its lending by 70 percent over the last year or so and that is in conjunction with the president working with community banks to increase their lending capacity. There were further improvements in lending with the $30 billion Small Business Lending Fund which helped provide funds to smaller banks and their small-business clients, as well as helping to shore up state level small-business loan programs which added a little more value to the Jobs Act for our small businesses.
In addition, Obama has begun to provide the needed tax cuts to small businesses, granted, woefully not enough, but he has laid a path for wider tax relief for small businesses than had ever been offered before during the downturn. The tax credits for small businesses extend to the hiring of new workers, to new investments, capital gains, health care and even tax cuts for start-up businesses. The jobs bill pushed by the president is just one foot forward for small business and now we need to get the administration’s other foot squarely planted to continue supporting small business initiatives.
Obama and his administration understand that support for small business is not just one single item or act but a dedicated, ongoing combination of processes that must be defended and fought for every day. For example, the current threat to eliminate the Ex-Im Bank must be recognized as a threat to American small and mid-size business exporters and I trust our president will get the reauthorization that is needed to continue that loan program and not let the overall foreign balance of trade continue to get any deeper for the U.S.
The recent 2011 Year-End Economic Report by the National Small Business Association estimates that small businesses are thinking less about a full economic recession and more like an economy that has at least flattened or has the potential for growth in coming months.
Small businesses are again ready to do business, are gaining more confidence and are on the move because Obama has paid attention and given us a few more tools to fire up that innovative spark.
Pedro Alfonso is president of Dynamic Concepts, Inc., a 33-year old Washington-based telecommunications company employing 90 individuals.