Small businesses have begun to create jobs, White House officials said today, though the recovery is not as robust as they would like. The White House released a report today detailing its attempts to aid small business owners, part of the Obama administration’s effort to counter charges that it is anti-business.
“There’s very little question that small business is now once again contributing to job creation and helping to lead a job recovery that is strengthening, but we would still like to see much stronger,” said Gene Sperling, director of the National Economic Council, on a conference call with reporters this afternoon. “We feel very strongly we have come a long way, and that this economy still has a lot further to go.”
The 78-page report consolidates the small business policies of the Obama administration, including tax breaks, efforts to boost lending, and support for exports and expanded government contracting. Sperling and Karen Mills, head of the Small Business Administration, pointed to 17 tax breaks for business owners, more than $50 billion in federal loan guarantees since 2009, and federally-supported programs that have provided counseling to more than two million business owners.
The SBA has a confusing emphasis on small business lending when their definition of a small business includes businesses as large as 500 employees. This definition includes over 99% of all U.S. businesses and certainly includes many of the businesses that most bankers would consider bankable even without an SBA guarantee.
The pair also said the administration is working to streamline regulations for small businesses, a goal Obama announced early this year. “We went to all quarters of the country, convened small businesses…and we got very, very strong and specific feedback on which areas [of regulation] were causing barriers for entrepreneurs to grow their business,” Mills said. In one example, Sperling said, the Department of Defense is trying to speed up the time it takes to pay contractors to 20 days from 30.
Among the president’s highest profile small business initiatives is a $30 billion lending fund that offers community banks low-cost capital if they increase lending to small businesses. Sperling said the fund has received 645 applications seeking $9.62 billion. Some banks that received money through the Troubled Asset Relief Program are swapping their TARP capital for money from the new fund.
Small businesses have reported flagging sentiment in recent months. The National Federation of Independent Business’s optimism index remains at recession levels. Sperling and Mills acknowledged the breadth of the problem. “There was not a single silver bullet that was going to address the needs of all small businesses,” Sperling said. He said the administration tried to “attack this problem at all fronts,” beginning with the stimulus package passed in early 2009, last year’s Small Business Jobs Act, and efforts this year to reduce regulation and bolster high-growth ventures with the Startup America campaign.
True small businesses (1-50 employees) are numerically the bulk of the pollster’s audience. These are the businesses that banks often decline and are currently competing with much larger businesses for SBA money. No surprise that the audience weighted towards smaller businesses is more pessimistic than the greater audience who is more likely to receive SBA stimulus funds.
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All of the above items in italics are our comments on the original article.
Originally posted by: John Tozzi on May 16, 2011 in BusinessWeek on Bloomberg.com