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The bookstore down the street just closed. A local Inn & Pub is being sold. The card shop just folded. The new auction hall that was doing so great just closed due to lack of funds to grow. The newly renovated firehouse restaurant has a for sale sign in the window. A small manufacturing operation can't get the funds to grow and can't sustain at the current level.
And, this is all within four blocks of where I live. I notice that we have great new paved roads everywhere I drive. I also see that small businesses are collapsing before my eyes. A couple of the ones that I noted above were big surprises, run by very astute business people. They appeared to be doing well. But, talking with the owners, they all report the same problems. Lack of funding up front & cost prohibitive expenses. A couple people I talked to stated that though there businesses were very successful for start ups, they decided to close because the risk of the financial devastation, if they continued and failed was too great. It was a gamble they just couldn't afford.
This is where the economic stimulus money should be going; directly to the people courageous enough to start a small business (or keep one up and running) in the worst economy since the Great Depression. Goldman Sachs just reported 23 billion in bonuses, Wall St. is having a huge party and the rest of the country is going bankrupt and can't find jobs. And, viable small businesses are closing their doors because they can't get help to stay afloat or ever open their doors.
Let's talk about starting a small business. Beyond a solid business plan, huge motivation, and tireless work, you need CAPITAL. If you have had any financial problems that hurt your credit rating, forget it. Banks will not lend to you. And, right there is a HUGE barrier for people to start small businesses. It would be logical for people who have lost jobs to be the new small business owners, but these very people are highly likely to have credit problems due to the loss of a job (and forget everyone with credit destroyed due to medical bills). There is no way we are going to have a new wave of small business owners creating the 'jobs of the future' because people can't get funded.
If the government is serious about small business creation, the lending criteria must change. It should be based around the work history of the person, a solid business plan, and other factors. Credit scores can't be the criteria (as everyone loses their credit score due to the games of the industry, this score is reflecting the financial responsibility of citizens less and less and less).
Loans should be very low interest or NO interest for the first few years of the loan. Better yet, I would like to see Small Business GRANTS, not loans. You want to increase the success of small business and create jobs, small business grants would go a LONG way to help. And, I mean real grants where the operating expenses of the business are covered for the first year. There are already programs (although far too few) that award grants to people who participate in small business developement programs, often under the wing of successful business people. These should be expanded. The amount of money it takes an individual to launch a small business is usually cost prohibitive. The government needs to invest in small businesses and help them get on their feet, if they want sustained job growth.
We must concentrate on resources at the community level and help people create and sustain their local economies. Shoveling money at Wall Street to keep this on-going shell game in play must end.
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