Hailed as the backbone of our economy, small businesses are struggling to secure financing and turn a profit in this recession. Stats show businesses with fewer than 50 workers shed 175,000 jobs just last month, all while consumer spending drops, banks close their coffers and the number of Small Business Administration loans diminishes. SBA loans, in fact, fell by almost a third in 2008, to roughly 78,000 loans.
Sure, President Obama’s $787 billion stimulus plan promises to double a small business tax deduction for office and manufacturing equipment and vehicles to $250,000. (Yawn.) And yes, when it’s all trickled down, small contractors may get a taste of the billions being set aside for the transportation and infrastructure sectors. (Woop de doo!) The SBA is also receiving some $700 million from Uncle Sam, most of which will go to reduce fees on loans as well as a new loan program to help small businesses meet existing debt payments. (OK, that’s better.)
But what if you want to start the next Google (Stock Quote: GOOG) and can’t get a loan? What if your craving for delicious cupcakes has less to do with your sweet tooth than an entrepreneurial calling, and you need seed money? What if your existing green business can’t afford the technology and worker training it needs to stay afloat?
Fortunately, a growing number of municipalities are stepping up to the plate and addressing the small business sector by launching new programs to boost and aid entrepreneurism with more loans and free resources. Here are some recent developments across the country.
New York City: Mayor Michael Bloomberg announced an 11-part plan to encourage the city’s newly unemployed, especially those in the financial services sector, to stay and help create the next generation of innovative businesses. Part of the $45 million program, called New York 2.0, will go toward starting an angel investment fund that will invest $20,000 to $250,000 in NYC-based startups. The plan will also offer free business training programs and lease subsidized incubator spaces, among other initiatives that are effective immediately.