Supporting Small Businesses in the US?
Original post made by Paul Losch on Sep 13, 2010
"W" talked it up while he was President, Obama now espouses it. Both sides of the aisle in Congress claim they have proposals that will help the country's small businesses.
From my perspective as a small business owner, it all is BS.
God bless the "small" business owners that earn over $250,000 a year. I have a thimble that I will put them in. Statistics suggest $35-50K a year is a better measure of what people who run small businesses are taking home.
My small business does not benefit from tax credits in order to hire more people. My small business benefits from building its customer base.
The complicating factor for small businesses like mine is that the credit needed to deal with new customers and orders is simply not there. Banks are not lending, so we cannot order and finish product that must be paid for before we can invoice or get factoring funding.
I did not like Bush and I am getting tired of Obama. They both talked a "game," neither a "good game," but little or nothing has genuinely happened. Congress seems to be spinning precariously with each side of the aisle claiming they have the solution for small businesses, but neither gets my support based on what they say.
Between the White House and Capitol Hill, it appears to this small business owner that they are all hat and no cattle. Claiming to want to help small businesses is becoming a moniker along the lines of "supporting our troops." No one can disagree with it, but what is genuinely being done?
on Sep 14, 2010 at 12:12 am
I could be wrong, but I don't think the "small businesses that are the powerhouses that drives our economy in job creation" earn $35-40K.
My first job as a kid was with a small business that employed 7 people including the sole proprietor. Even back in the .... well, dim and distant past that guy made $100K or so which was enough to live in the hills of Belmont and belong to the country club.
This is not the class of business that these taxes are referring to or people are talking about.
Yours is not a tax problem, it is a bank problem. If you have a record of paying your bills I'm wondering why the banks won't make you loans?
I think most of what we hear on this subject is baloney, either people who are not in business vilifying those who are, or those who are in business trying to garner pity, or use their positions to lobby for other kinds of help.
It's true, nothing is being done though. All that TARP money and very few if any loans have been modified.
No one knows what is going on so how is anyone going to relax or take the lead when nothing is known and no one can predict anything?
Meanwhile it seems to me when I go to the store prices are still going up, even though we hear talk of deflation.
I just wonder if people are just waiting for whatever the first big crack that shows us how bad things really are?
on Sep 14, 2010 at 12:32 pm
I largely agree with your comments.
In my company's case, our sales are almost entirely during the cold weather season, but we incur our costs this time of year doing production. It is a classic working capital type of financing situation, I have a great relationship with my bank, but they just are not providing these types of loans. I am not alone. The banks and friends in small business with whom I have spoken just basically say such lending is, to put it politely, "on hold."
I welcome getting a tax credit for hiring more employees, but it is not something any small business will do unless there are more sales to justify the staffing. A seasonal business also tends to keep permanent payroll to a minimum and either outsource or hire temps. My company does both.
Bush failed in business, Obama has no experience in business, and the current economic team in the White House consists of mainly government lifers (Geithner, Volker), arrogant academics (Summers), and Wall Streeters who know nothing about small businesses, let alone give a rat's ass about them. Congress behaves like they were playing a game of Monopoly, and that their "work" has no bearing on what is actually going on in peoples' lives.
I find DC to be a lovely city to visit, be it for a Glen Beck rally, a Charlie Rangel rally or to spend time taking in its most excellent museums. I actually have had some jobs in a prior life where I worked with federal agencies in DC. The work took way too long, but the US Civil servants with whom I worked were largely terrific.
But I drink bottled water while I am there. Those who partake of the Potomoc vintage seem to have mind altering experiences. And it appears to be bi-partisan.
on Sep 18, 2010 at 11:37 am
"Wells Fargo and Comerica Bank have challenged critics who claim they are being too selective in making loans, saying their underwriting standards have changed very little over the past two years. It's the recession and weak demand for loans that has led to shrinking portfolios, said bank executives interviewed by The Business Press."
As you are well aware, small business loans are scrutinized by the banks in terms of the individual, business plan, personal equity invested, previous payback record, etc. The banks seem to be saying that the demand from qualified borrowers is down. Perhaps your problem with your banker is that he/she is no longer willing to make less-than-qualified loans (aka "junk" loans). If you feel that you are qualified, you might want to contact Wells Fargo or Comerica.