As a consultant who specializes in helping small businesses I get a lot of questions about how the economy is affecting my clients. Following last night's Presidential news conference, the topic changes today to what impact the stimulus package would have on the small business marketplace.
Both the House and Senate seem to agree that bank loans need to start flowing again. As we've seen over the past six months, small businesses both new and existing have found it challenging to find operating capital from banks willing to lend in these turbulent times. While both houses of Congress have plans on how to solve the problem, the solutions are wildly different.
The House stimulus plan which was passed two weeks ago, focuses primarily on increasing the guarantees that the Small Business Administration makes to banks that issue small business loans. The House bill directly earmarks $440 million of the total $820 billion directly for these small business initiatives.
The Senate plan which was passed Tuesday wouldn't change the SBA's loan guarantees, but would temporarily eliminate the fees the SBA charges for its guarantees. It sets aside $615 million exclusively to cover the dropped fees. The SBA's small microloans program is a secondary focus of the Senate bill. The Senate would allocate $6 million in new funding for the microloan program - plus an additional $24 million for marketing, management and technical assistance to lenders who make those microloans. In total, the Senate's proposed direct stimulus spending for small business initiatives adds up to $730 million, out of the bill's estimated $838 billion cost.
The Senate and House bills are now moving to conference to negotiate a final compromise bill. President Obama hopes to sign the final bill into law this week.
No comments:
Post a Comment