Small biz promises: Where Obama stands
President Obama has pledged to help Main Street where it is hurting the most. Here's a look at where he's followed through -- and where he hasn't.
- October 10, 2008, Chillicothe, Ohio
What happened: Recent efforts to help small businesses haven't mirrored those implemented in the aftermath of 9/11, but new measures from the stimulus have been productive. Obama's $787 billion stimulus plan includes incentives for banks to make more loans backed by the Small Business Administration. The program temporarily reduces fees associated with those loans and ups the loan guarantees to 90%.
The plan also calls for a new initiative known as "America's Recovery Capital," which allows viable small businesses to receive interest-free loans of up to $35,000 to pay down existing debts.
But lending activity remains down, primarily because banks still see small business loans as a huge risk. (According to one analyst's report, their 2008 failure rate hit almost 12%, compared to 2.4% in 2004.) Banks also hesitate before making SBA-guaranteed loans because they cost a great deal to administer -- regardless of the loan amount -- and because the agency can back out of these guarantees even after banks make the loans.
NEXT: Health care
| Sponsored by |
From fighting forest fires to laying carpet in day care centers, here's what 5 small businesses that got stimulus-funded contracts are doing with taxpayers' dollars. More
President Obama meets often with small business owners, peppering his speeches with their stories. We checked in with 6 entrepreneurs touted by the President to find out how they handle health care. More
More than 45,000 businesses closed their doors for good in 2009 -- including some that survived for longer than a century. Here are 6 historic companies that vanished. More
