If you’ve been putting off making significant enhancements to your business because of financial concerns, President Obama’s recent proposal to increase small business lending might be just the news you’ve been waiting for. The president is proposing increasing the size of loans available through the Small Business Administration, as well as providing inexpensive capital to small banks.
Whether you’ve been feeling skittish about seeking out loans or you’ve had difficulty getting approved by larger financial institutions, these measures, if passed by Congress, would provide welcome financial relief if you need a little extra help growing your business in a competitive economic environment.
Highlights of the president’s proposal include:
- Increasing the size of the SBA’s 7(a) loans from $2 million to $5 million.
- Increasing the maximum size of microloans to $50,000, up from $35,000.
- Providing lower-cost capital to credit unions, community banks, and financial institutions. Eligible banks will be required to explain how the funds will be used and to file quarterly reports on their small business lending practices.
The president’s announcement comes just weeks after it was reported that more than $1 out of every $4 spent on federal Recovery Act contracts has gone to small businesses. As of October 2, nearly 26% of federal stimulus contracting dollars, or more than $4 billion, was awarded to small businesses.
What do you think of the government’s efforts to help small businesses? Do you feel Washington is doing enough or too little? Have you benefited from the Recovery Act in any way? Let us know.