Small Business Owners Seek Relief
October 13 2008 by Fayazuddin A Shirazi
Consistently marred by a declining economy small business owners are increasingly voicing concerns on what they term as “partial attitude” of the federal government and its allied agencies. Small business owners are blaming the federal government for its lackluster attitude towards small business enterprises, while it is actively patronizing bigger Wall Street firms hit by the sub prime crisis.
“The nation’s 23 million small business owners reasonably expect that the Congress, the administration and the Federal Reserve; which have spent nearly a trillion dollars in the past few months bailing out big Wall Street firms such as Bear Stearns, Fannie Mae, Freddie Mac and AIG should also equip small businesses with a substantial emergency financial plan,” pleads George Cloutier, Chairman & CEO of the Orlando, FL based American Management Services, a firm offering implementation-based profit program and turnaround services to privately held small and mid-sized businesses across the country.
Speaking to CE online, Cloutier laments that there is no financial assistance for the small businesses from either the Government or any of its agencies. “If the government authorities can spend hundreds of billions of dollars to bail out Wall Street firms, why can’t the authorities earmark at least $25 billion for small businesses, which are potentially the employers of about 60 percent of our working population,” reiterates Cloutier.
He says that small business owners are facing an unprecedented credit crunch with increased number of bankruptcy filings everyday. “With rising gas prices and an economy in recession, its time the federal government and congressional leadership implement concrete emergency programs to help small businesses,” adds Cloutier.
What should small business owners do?
While Wall Street firms can comfortably borrow billions at 2.28 percent of interest, their smaller counterparts have no such arrangement. “Tens of thousands of small businesses will fail this year due to government inaction and lack of credit availability. With 60 percent of national jobs to its credit, small business industry is clearly an economic engine, which is stalling. Its time to get it re-started,” quips Cloutier.
What should small business owners do?
Calling for immediate attention from the Government authorities, Cloutier pleads that an emergency disaster fund for small businesses be created; besides increasing the loan guarantees of SBA (Small Business Administration) and hiking the quota of the SBA designated government contracts to 35 percent from 25 percent of the federal procurement spending.
“As an immediate measure to help the ailing small businesses, the government must create a $25 billion emergency disaster management fund for small businesses. With this corpus fund the small businesses which are now struggling to survive with the burgeoning energy costs, a weak economy, increased labor costs and lack of credit options can breathe a sigh of relief,” says Cloutier.
Cloutier believes the emergency plan should also allow banks to increase its loan guarantees of SBA loans from 75 percent to 100 percent because of which additional financing can be ensured to the beleaguered small business entities.
Deploring the inability of the small business owners to be organized enough to affect a change, Cloutier laments that small business owners are busy struggling to survive each day and achieve economic priorities. “They cannot take the time to run around
For their part, Cloutier suggests, small business units must cut cost viciously, look for additional financing options much more aggressively, work with suppliers & vendors for better pricing structure; and initiate an aggressive pay for performance program.
What should the Federal Government do?