Recently, a Facebook rant against the Small Business Administration turned into a broadside with the conclusion that the government is going after small businesses and driving them out of business. Their proof? The chaos in stimulus loans during the first Covid-19 Cares Act. Seems that large businesses and corporations soaked up the money fast. That left the small businesses out in the cold. So much so Congress approved a second stimulus program with targeting more of the benefits specifically to small businesses.
I had pointed out to the Facebook ranters that their conclusions were incorrect, that the US Government was very supportive of small businesses. Indeed, Congress recognizes the importance of small businesses as the ‘job growth engine’ of the economy. So much so, the Congress created the Small Business Administration many decades ago to help small companies form and prosper. Then in 1962, Congress approved the formation of an SBA affiliate named SCORE – the Service Corps of Retired Executives. SCORE’s job was to mentor entrepreneurs to start small businesses, and help them grow and thrive. The service then and now is FREE.
Today, the SBA is very well established throughout the nation and hard at work with small businesses.
Also, today, SCORE is alive and well. It has 12,000+ volunteers working nationwide mentoring small businesses. Roughly 60% of SCORE’s clients are start-ups; 40% are already in business but struggling with challenges that threaten survival. The Covid-19 pandemic is one of those challenges!
How do I know that? Because I am a SCORE volunteer, have been for 6+ years. Our local chapter has 110 mentors working diligently with area small businesses. Mentors are a diverse group of men and women with skillsets brought fresh from their successful business careers. All cultures are represented in SCORE and we reach out to all who have a need for our services. The price is still FREE.
Congress continues to fund SCORE’s operation through the SBA. Those funds provide a small central staff in suburban Washington DC, and central data systems management, coordination, policy and administrative supports. Local chapters have few expenses which are supported by the national office, but operations locally are low cost and still free to clients.
SBA is called upon for lending assistance to small business owners. The funds mostly come from area banks and credit unions, but the SBA covers some of the risk for losses. Disaster lending has also been a large task of the SBA for many decades.
Much of the current pandemic legislation that funds nearly $2 trillion of aid to businesses, is assigned to the SBA for implementation. The reality is the job was too big for a small agency to operate all at once. Not only were rules and regs of the program from Congress incomplete and confusing, but no help was provided to the SBA to handle the rush of loan applications. The works gummed up in a flash.
That’s an administrative problem certain to happen in times such as these. No intention to frustrate or harm small business owners was meant.
Rather, the intent is clear: support small business formation and operations so that job creation in our economy continues unabated.
The mess is getting cleaned up. Loans are being made. Paperwork has smoothed out. If you are a small business owner and need help in this pandemic, contact the SBA or your banking institution for assistance. Patience is needed but stick to it. Help is at hand.
May 15, 2020
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