It was not obvious to everyone during the campaign, but it always appeared that Barack Obama understood the role of small businesses have in the US economy. An entrepreneurial culture, where small businesses can innovate and drive change is important to any economy, especially a struggling one. And Barack Obama stressed that more than any of the other candidates. And now, that message is moving to the front of the economic battle.
Today, President Barack Obama will announce a plan to help struggling small business owners. This article, from CNN, discusses the two programs that his plan will address right away.
The first, called “the 7a Program“, allows for the Small Business Administration to back up to $2 million in loans to small businesses. This frees up banks and other lending institutions to once again free up some funds and help small business owners meet the financial needs within the company.
The second, called “the 504 Program“, guarantees up to $4 million for small business development project. Under the new plan, the fees for borrowers and lenders will be reduced or eliminated to make applying for these funds more attractive.
These are two important steps in turning things around for small businesses. It is even more important that Barack Obama and the rest of his economic team focus on what small businesses can do to give a much needed boost to the economy. Increasing the availability of short term funds will go a long way toward relieving many small business owners. But to improve the nature of the economic climate, it may take more of a concentrated effort on paving the way for successful small business to grow and compete.
Often times, small businesses will find solutions to problems before the larger companies. The problem is, the landscape is such that larger companies often have too much power and are resistant to change. We have seen this in the auto industry, the printing/media industry, and the financial industry. Times are changing and we need the President and his administration to see our flaws and empower those people with the answers to change things.
Small businesses are the start.