$100 Million Increase for Small Business: Good or Bad?
The Obama administration is asking that Congress allocate another $100 Million to the Small Business Administration to assist small businesses in getting access to credit. This is a relatively small amount. Think of it this way, it represents one hundred (100) - million ($1,000,000) loans. Using that analogy, that would be equivalent to 2 loans for each state in the union. That's not a lot of stimulus. Or let's say that the loan amounts average $250,000 - that represents 400 loans (or approximately 8 loans per state). Now don't misunderstand, SBA loans aren't allocated to each state. No, it's first come, first serve by the bankers that are willing to make these loans. And there's something else you should know, an increase in "funding" by Congress is a misnomer. Banks lend the funds for SBA loans. The Small Business Administration provides a guarantee up to 90% of the loan amount. What the government is doing is "allocating&quo