A New Agenda for Small Business?
No segment of American industry has been pummeled by the Great Recession more than minority business. As the economy shows signs of recovery, these companies––most of which can be found in the small business sector––have been struggling to gain solid footing. Access to capital and government contracts, most assert, would stabilize their companies and eventually spur growth. Others need such lifelines to keep from joining the ranks of the more than 30,000 businesses forced to file for bankruptcy protection in the first half of 2009. Although the Obama administration has initiated small business financing programs––including freeing up more than $15 billion by increasing guarantees and lowering fees as part of the Small Business Administration’s 7(a) loan program––financial institutions, large and small, have still been reluctant to provide funding to entrepreneurs. For example, the SBA reported a 43% decline in 7(a) loan approvals from a year earlier. And critics maintain that the America’s Recovery Capital Loan Program that was part of the $787 billion stimulus program is operating at a clunker’s pace: Reports reveal that as of Sept. 1, only roughly $65 million––1,850 loans at a maximum funding level of $35,000––of the $255 million had been disbursed to small business owners. “Small firms are in such bad shape today that those who need loans are not likely to be able to qualify with respect to their credit worthiness,†says Thomas Boston, director of research and innovation of the Atlanta-based economic consulting firm EuQuant and a member of the black enterprise Board of Economists. “ What small firms need is revenue and procurement opportunities.â€
