Today the online version of the Wall Street Journal had an article, “Obama Is Confident Congress Will Pass Economic Recovery Bill,” that reported that the Stimulus Bill has now grown to nearly $900 Billion. Given that small businesses represent 99.7% of all employer firms, employ about half of all private sector employees, and have generated 60-80% of net new jobs annually over the last decade, how much money do you think was included in this package to directly provide assistance to small businesses? Maybe 20%? 50%? 60%?
No . . . the US Senate released a press release on the American Recovery and Reinvestment Plan which indicates that $730 million will be set aside for loans through the SBA. This represents about 0.1% of the overall stimulus package. While it is true that there may be other funds set aside such as the $16 billion earmarked for construction, renovation, and repair of schools which will likely be used to employ small companies such as the construction trade, I find it troubling that more direct support of small businesses is not included in the proposed stimulus package, given that small business is such a strong driver of employment.
To put this in perspective, let’s compare the $730 million SBA loan funding increase to a few other line items in the stimulus package that appear to be much higher priorities to our government officials:
1. $2.25 billion for redevelopment of abandoned and foreclosed homes.
2. $1.5 billion for homeless prevention activities
3. $1.5 billion in additional funding for NASA (incidentally NASA provides less than 18,000 jobs, whereas businesses with less than 500 employees provide close to 60 million jobs).
4. $2.6 billion to replace older motor fleet vehicles owned by the federal government with alternative fuel autos
5. $1.1 billion to evaluate the relative effectiveness of different health care services and treatment options
6. $870 million to complete funding for the President’s initiative on pandemic flu preparedness
From my perspective, it appears that the stimulus plan is a lot more about spending money on pet projects than it is about investing in things that will likely provide a long-term return on investment.
Codiligent Business Brokers - Portland, Oregon based business brokers representing sellers of businesses with $500k – $20 million in annual revenue. To schedule a free consultation to discuss the possible sale of your business you may contact Eric Williams at 503-535-8817 or E@codiligent.com
