Administration, today nearly half of small business owners are doing this, when previously it was just one out of seven. The problem with using credit cards, however, is that business owners are finding the terms can change at any time, with increased interest rates and decreased lines of credit.
Landrieu says that her top priority will be to address the issue of access to affordable capital.
“Business owners traditionally take out lines of credit against the value of their homes for start-ups, or they will access credit cards. With the SBA clamping down on its lending programs, those are basically the avenues open to small businesses, and all of them have serious barriers in the way. They must be taken down. I’m not sure exactly how to proceed, but this is an issue that needs to be addressed by this Congress very, very quickly in the stimulus package.”
There are a number of SBA provisions in the Senate version of the stimulus bill that include waiving loan fees, an increase in funds for the SBA’s surety bond programs, and the creation of an accountability board to oversee SBA stimulus funds. Landrieu also wants to see reinstated the requirement to use a certain percentage of small businesses and minority contractors in the stimulus package, which was waived in the first TARP bill.
“The bigger issue and the point of [the hearing] is that small businesses are not charity cases. They’re a catalyst for growth and development,” Landrieu says. “This country needs every small business to survive and grow and expand if we’re going to truly revitalize this economy and we’ve tog to be thinking more strategically as a Congress about that.”