Tuesday, 03 November 2009 12:52
For small business owners, and especially dealers, credit is crucial. Without it, we can't purchase inventory, pay our employees, or heat and light our stores. Without it, there are no small businesses.
When the economy first began its downward spiral more than a year ago, credit was hard to come by. Then it became REALLY hard to come by. Banks that were once the small business owner's best friends would no longer give us the time of day.
In an effort to save the small businesses that support countless communities, the government stepped in and expanded the Small Business Administration (SBA) loan program to include more businesses and provide larger working capital loans.
That was a smart move by Uncle Sam. After all, small businesses with fewer than 500 employees represent 99.9 percent of the 29.6 million businesses in the United States. They employ just over half of all private sector employees, pay 44 percent of total U.S. private payroll, and have generated 64 percent of all new jobs over the past 15 years.
Not too shabby.
But while some analysts are seeing signs that economic recovery is on the horizon, small businesses, including dealerships, still need access to SBA loans in order to survive. That is why AIADA has joined a number of other trade associations to create the Small Business Access to Credit Coalition. On October 28th, we sent a letter to Members of Congress asking that they (1) extend the SBA loan guaranty provisions of the America Recovery and Reinvestment Act through Fiscal Year 2010 and (2) support an increase in the maximum loan size and the maximum guaranteed portion of SBA loans from $2 million to $5 million.
Click here to read the full letter.
By extending the program, Congress will do its part in making sure our economic recovery doesn't stall out. And if the maximum loan size is increased, businesses will be able to do more than survive; they will be able to expand and create new jobs and opportunities.
Currently, the bill in the House of Representatives, H.R. 3854, Small Business Financing and Investment Act of 2009, extends the program but increases the maximum loan size to only $3 million. The House held their vote on the legislation last week and it passed by a vote of 389 - 32. A Senate version of the bill would allow for the $5 million loans that both the Small Business Access to Credit Coalition and the White House support and is currently moving through the legislative process.
AIADA will be closely focused on this issue as it works its way through Congress. We will continue to keep you informed as we work on what matters most to dealers: true and lasting economic recovery.
Russ Darrow, AIADA Chairman
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