A conference is about to be held on March 22 for finding ways to “expand access to capital”. The treasury department is aiming to reduce challenges at each growth stage for small businesses. The holding of conference is being announced by Treasury Secretary Timothy Geithner. It has been found that challenges of raising capital begin from seed capital to growth equity and pervades in starting public markets.
The Obama government has announced panels, lending programs and other initiatives. ‘Start-up America initiative’- a very crucial program of the administration is being launched for furthering economic growth, prosperity and bringing greater diversity in communities and individuals. The President talks about innovation and competitiveness but has very few details about getting small businesses stimulated. Intentions have remained good but then after a few weeks there has been a dramatic change in the way loan grants were funded to small business administration. Funding to SBA got reduced and that made a huge impact on access to capital for small businesses.
Two new programs got launched under the guidelines of SBA – ‘Small Loan Advantage’ and ‘Community Advantage Program’. But the problem is that many financial institutions seem to be uninformed about the lending programs. Even the State Small Business Credit initiative that is supposed to lend $15 billion to small businesses received only $3 billion in funding especially in states like Michigan, California and North Carolina. Also the small business lending fund is yet to award first round of loans to banks with less than $10 billion assets.
Loan guarantees that expired on Dec. 31, 2010 can be extended. The reason is such guarantees have stimulated small business lending in 2010. The second consideration would be to remove unnecessary barriers that become hindrance to business growth like the capital gains taxes. Then it would be a good step to allow IT skilled people to come to US and work in the country. This is because there is a dearth of IT and other skills that is detrimental for the growth of small businesses.
Rohit Arora,co-founder and CEO of Biz2Credit, says “small businesses need tax incentives to boost exports, hire more people, and gain access to best technologies from across the world in order to compete in the global economy.” The Obama government has expressed its support for enhancing exports and needs to keep its promise. Arora suggests, “We need to follow German model of technical excellence and government incentives to train and retrain workers in order to make small business participate in boosting exports.”
This article was submitted by Rohit Arora, co-founder of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to