My latest column at the OPEN Forum looks at President’s Obama’s recent announcement on Monday of the latest small business economic plan. While I think it is positive for some segments of small businesses, overall the main question that comes to mind is: “how relevant is it to what ails small businesses?”
On Monday, March 16, 2009, President Obama announced a new plan to help small businesses. (Announcement here – PDF.)
The plan is mainly centered around easing SBA loans. The plan calls for the government to buy up SBA loan securities to free up the secondary markets so banks can sell their SBA loans; it cuts SBA loan fees; and it increases the Federal guarantee on SBA loans to 90%. It also calls for the 21 largest banks getting Federal funding to report on their volume of small business loans each month. The rest of the announced provisions for the most part were already included in the Stimulus package and not new.
So: thumbs up or thumbs down?
I’d say the plan is mildly positive, but mostly it’s just not relevant to the majority of small businesses. Here’s why:
To the extent small businesses actually want SBA loans, this could help. However, not every small business wants or needs a loan.
To me, the fact that the President took the time to make a small-business-specific announcement and has been more positive in tone of late, will have a bigger symbolic impact than the SBA lending provisions.
Read: Is President Obama’s New Small Business Plan Relevant?