Big news the past few days for small businesses.  Help is on it’s way.  Loans to solve all your problems…and more.  The magic of “stimulus” could now trickle down to the largest pool of employers in the country – Small Business -  but only if you’ve run this Small Business to the brink of bankruptcy. 

Hard at work? I know we are.

 The 2009 Recovery Act is here to help businesses with loans up to $2 million.  The inherent problem with the Act is its overt support of unproven and debt laden organizations.  What about existing businesses that pay taxes, employee people, have not to laid off workers (in return for less profits) to protect their long term strategy?

Oh yeah, one other thing.  The Fed put the “stimulus” in the hands of the squeaky clean banking industry.   No wonder debt and poor business principals are a good thing.

The act specifically calls out the following…

• “Typical 7(a) borrowers are entrepreneurs looking to start, expand or acquire a small business. In many cases, the applicant may have a strong business idea, management ability, and sound financial projections, but may have a shortfall in collateral to secure a loan or equity to put into the business.”
• “In order to qualify for a SBA 7(a) loan, borrowers must be unable to secure conventional commercial financing on reasonable terms…”

Kudos I say. It a great idea to reward those bad businesses who recklessely gambled (and lost) or have yet to be in the game.  It’s not so much about the new business – I welcome them – it’ more about those who I will finance with my increasing tax obligation.  

The act does go on to say that, “as part of the Recovery Act, SBA is developing a new program to help viable businesses…”, but what, when, and how?