To gain some perspective on the small business scene, I interviewed Melinda Emerson (aka “SmallBizLady”) who is a Veteran Entrepreneur, Small Business Coach and Social Media Strategist. She hosts #SmallBizChat weekly on Twitter and publishes a resource blog on small business best practices. Her first book, Become Your Own Boss in 12 Months, was recently published.
Question: Overall, you’ve already given the Obama Administration an average grade for its first year, what are the key areas you think were most successful?
I think that in President Obama’s first year in office his administration did very little to directly assist small business owners. However the administration’s program which subsidized COBRA health benefits helped the families of many small business owners whose spouses lost their jobs which in many cases was their only source of health insurance.
The second area that will be helpful is the recently passed Health Care Reform Law. This is a big boost to small business owners who will benefit from the 35% tax credit per employee that the law provides.
Question: I know you’ve spoken about the ARC Loan program before, could you explain a bit more about that SBA program?
ARC stands for “America’s Recovery Capital” Loan Program and provides up to $35,000 in short-term relief for viable small businesses facing immediate financial hardship to help ride out the current uncertain economic times and return to profitability. Each small business is limited to one ARC loan and the SBA administers the program.
The expansion of the SBA’s ARC loan program was well intentioned, but due to the paperwork burden and despite the SBA guarantee there was no real incentive for the commercial banks to participate. In fact according to the SBA, as of March 19, 2010, my bank has approved just 6 ARC loans across the state of Pennsylvania. Also due to the fact that many small businesses began to see credit tighten in first quarter of 2008 many businesses were no longer credit worthy enough to even pursue the ARC loans.
Question: We all know that the biggest challenge that small businesses face is access to capital and opportunity. Since the beginning of his second term the Obama Administration has turned its attention to small business owners and job creation which go hand-in-hand. What do you think they should do next, in this second year?
I look forward to the Obama Administration turning its efforts to making it easier for small, minority and woman-owned businesses to do business with the federal government. But by just enforcing the laws on the books regarding set-aside programs, things would be much better for small business owners as vendors to the federal government.
On the campaign trail candidate Obama said, “98 percent of all American companies have fewer than 100 employees. Over half of all Americans work for a small business. Small businesses are the backbone of our nation’s economy and we must protect this great resource. It is time to end the diversion of federal small business contracts to corporate giants.” I sincerely hope he keeps his word.