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Goldman Sachs Announces $500M in Aid to Small Business

Posted by: John Tozzi on November 17, 2009

Lords of high finance may seem unlikely sources of aid for small businesses. But Goldman Sachs (GS), along with Warren Buffett and several education and nonprofit groups, today announced a $500 million charitable project to aid small businesses over five years.

Goldman will invest $300 million in community development financial institutions, lenders that focus on economic development in low-income neighborhoods. The program will also provide $200 million in scholarships for business owners to get training at community colleges and other institutions. Loans and classes funded through the program are set to begin early next year.

The initiative, dubbed 10,000 Small Businesses, seeks to drive smalll business job growth by combining business education, mentoring and networking, and access to capital. Goldman is partnering with respected small business organizations, including the Initiative for a Competitive Inner City, which focuses on small business development in underserved areas.

Buffett (who is Goldman’s largest investor) will sit on the program’s advisory council along with Goldman CEO Lloyd Blankfein, ICIC founder and Harvard professor Dr. Michael Porter, and a dozen other leaders from the business and educational communities.

The plan may be as much about softening Goldman’s image as helping small business. The firm faces sharp criticism and public anger over doling out bonuses just a year after taking $10 billion in bailout money, which it has since repaid. (Goldman still enjoys other government guarantees and benefited from the bailout of AIG.)

While much of the economy struggled through 2009, Goldman recorded three booming quarters after taking a loss at the end of last year. The firm reported net income of $3.2 billion in the most recent quarter, and has set aside $16.7 billion for compensation.

Reader Comments


November 17, 2009 6:28 PM

Really, this is going to do nothing. The inner city is defined as an area where a house is not allowed to appraise for the material cost needed for improvments. The city is condemned because of a wigi board appraisal system on real estate. You can dump a trillion into education and all it'g going to do is produce highly educated unemployed people in the long run


November 17, 2009 6:33 PM

Since nobody at the Small Business Administration can/will do anything. I hope this will have a chance for those of us wanting to put people back to work vs. just talking about it.


November 17, 2009 6:37 PM

How about Goldman keeps their table scraps and small businesses like ours get access to virtually unlimited 0% money too! Free insurance (in case we really mess-up our business plan) would be a nice touch too!


November 17, 2009 8:05 PM

It is difficult to be impressed by this.


November 17, 2009 8:05 PM

It's a start.


November 17, 2009 8:52 PM

so is giving oxygen to a dean man


November 17, 2009 9:00 PM

Tell me where I can buy a lot, borrow the money needed to build a house, pay for the Gov. permits & fees, then sell the house & make a small profit? Banks do not need to lend on real estate because all their overhead, profit & bonuses are paid by us.
Until financial markets are available to main street, no sustainable turnaround will occur.


November 17, 2009 9:53 PM

Why not piggy-back on the Community College initiative and steer something towards Community Colleges as an incentive to facilitate the incubation of new small businesses. For instance, the seed money could be offered as matching funds to encourage local businesses to team with Community Colleges to offer a business-development or business incubation plan. For instance, a curriculum would be offered around developing crude business-plan drafts submitted by entrepreneurs-in-waiting, enrolled students. Ancillary businesses, banks and other necessary plan supporting capacity would be recruited as part of the process of teaching negotiation, communication, loan packaging, projections, and logistical planning. Business plans could be restricted to public-interest areas that target national or local interests. For instance, the nation presently faces an obesity epidemic. So the submission of a a business plans that can make a viable economic case for encouraging a more active consumer lifestyle change while, let's say, contributing to the reduction of energy consumption, could be studied, presented and funded. The public-interest in reducing our country's dependence on foreign oil could be another target. Entrepreneurs-students could study and submit creative plans for developing ways in which local mass-transit departments might better market their services. A business plan that facilitates the sharing or co-opting on the purchasing and use of automobiles could be another of direction on the same target. Alternative transportation, energy conservation, technology, and the implementation of community and cultural life-style changes that encourage healthy and active living are all areas that need the implementation of more imagination from small businesses that through their advantage and ability to see and change more nimbly than large business and government, can be the source of the change that society obviously is thirsty for.


November 17, 2009 10:07 PM

Jim - "Tell me where I can buy a lot, borrow the money needed to build a house, pay for the Gov. permits & fees, then sell the house & make a small profit?". The credit market is not nearly as bad as some make it out to be, in terms of home loans. Living in Charlotte, developers are still starting new housing and condo projects, selling them to buyers, and the buyers are getting mortgage approvals from banks. At reasonable rates, for buyers who have reasonable savings and income for the mortgage they're looking for.


November 17, 2009 10:16 PM

You've got to be kidding me. They raped us for billions and now they're throwing the little peons a bone? Tax the rich. The time has come.


November 17, 2009 10:30 PM

Cool, Run the Fed and net yourself trillions from others' capital, as well as insulate yourself in complete immunity, fart a piddly $500 million to the American sucker you've bilked - and call it a day.

Folks - this criminal org makes $100 million A DAY just off the dollar exchange manipulation they control.

HR1207 - Lets put these crooks where they belong.


November 17, 2009 10:39 PM

500 million to go to lawyers when idiots injure themselves inside your shops. Sad America.


November 17, 2009 10:40 PM

If Goldman truly had remorse, they'd split themselves up and support reforms to ensure no bank ever got as large as they are now.


November 17, 2009 10:46 PM

At the community colleges in my area they have small business economic advisors. The advisors are available anytime during the week day but not in the evenings or the weekends when business owners are able to be away from their organisations. Nor is there a way for business owners to do a on-line chat to the advisors when attempting to resolve an issue. A solution to these issues would be an improvement.


November 17, 2009 10:59 PM


I like your incubation idea. I wouldn't restrict it to a public-interest area. There may be a need for particular goods or a service that the community lacks that doesn't fall into such a narrow criteria.


November 17, 2009 11:11 PM

It is a commonly known fact that Goldman would have collapsed had AIG collapsed. Hank Paulson wasn't about to let that happen - he owns way too much Goldman stock! So he had the Fed intervene and suddenly Goldman became a guaranteed winner. We taxpayers are the suckers!

And the government doesn't care about small business owners like me. Neither does Goldman, in reality. It's all about big business, political donations, etc, and the taxpayer gets screwed.

These crooks at the top better watch out!!!

Carbon Elemental

November 17, 2009 11:19 PM

Hooray, I can get a subsidized class at my local community college...this isn't going to do jack for helping produce healthier small business.

Would have been 10x more effective to do matching loans at very low interest or something that would have an immediate impact now on job and business growth....the whole reason Goldman can make the kind of money they are making to offer this program is because of....loaned money at nearly 0% by the govt to them.

So instead of repeating what helped them to small businesses, they offer some low cost college courses?

Maybe next time they need a bailout, the governement should offer them some subsidized classes at their local community college - then they can see how helpful that is to their own business.


November 17, 2009 11:30 PM

Actually, people should look at Porter's small business inner city group. He has been successful and it is a group that uses and develops inner city and small business resources. This is a well thought out and well executed program.

Smoot Langston

November 18, 2009 9:53 AM

motivating kids early can be effective in them completing their education and becoming viable working citizens. My son has talk to over 400,000 kids in schools through his For The Children Foundation, in the last 15 years. He changes lives, if you point your money in the right direction it can have an impact.
Smoot Langston


November 18, 2009 11:35 AM

I was laid off from Goldman Sachs on November 17, 2009 (a year ago). At that time we were all given severances of three months to a year. Upper management got a year -- support staff got three months. Everyone laid off had been with the company over five years. They laid off 15 percent of its workforce simply so they could get the free bailout money. Everyone in my area that got laid off had been excellent employees and had all gotten excellent reviews over the years. They did not offer early retirement, it was not last in/first out, they did not ask if anyone wanted to leave -- they just cut people. The issue lies at the people they chose to cut. Out of the 15 in our office that got cut only three were men -- all of them in management or professions. Out of the 15 let go, nine of them were women over the age of 40. Out of the 15, two were disabled (both had worked for the company over 15 years each), one in a wheelchair and one legally blind. One person had been with the company 29 years and they called him and laid him off while he was in his hospital bed on medical leave facing surgery. Out of the 15 people let go, eight had had recent serious illnesses and now their health is in jeopardy because of the high cost of health insurance. In this past year, at least two of the 15 has had to file Chapter 13 and three are at risk losing their homes, one already lost her home. Now to show you just how dirty this company is -- they took the bailout money because heaven knows if they went under the country would be ruined, and within weeks of laying these loyal, hardworking, experienced people (albeit ones with health and disability issues as well as being older women), they started advertising for their replacements. The accountant who was in the hospital had his job advertised before he even was laid off. The reasons we were told they were laying us off was that they couldn't afford us -- yet they paid everyone pretty good severance packages and replaced every employee before their severance even ran out! They never offered the displaced experienced employees their jobs back. Add that to the fact, that Goldman now brags that they are paying all of their employees a bonus this year that averages $700K per person, not to mention that they paid bonuses last year when they were doing so badly that they needed bailout money and they laid off 15 percent of their staff. One of those $700K bonuses would have paid a year's salary for everyone who had been laid off in my division. One bonus. How many bonuses did the pay? They laid off people who had given many good years to the company, had many good years to still give, had gotten excellent reviews throughout the year, who had experience and job knowledge and specifically put people out of the street who would have trouble finding work due to age and disability. So what is my take? If a company lays people off and then shows such a significant profit that they can pay huge bonuses, then they didn't need to lay the people off, then they need to be footing the entire bill for the laid off people's unemployment benefits as long as they are turning a profit that could have paid for those employees to continue at their jobs. There is NO reason the government should be footing the unemployment bill for Goldman Sachs employees. If they have the money to replace those employees immediately, then they certainly did not need to take the bailout money, and ultimately they did not need to lay off the experienced, respected employees.


November 18, 2009 11:45 AM

These guys are immoral theives. They should be in Jail.

I'm all for making a profit. I have the highest regard for Warren Buffet, but GS runs the fed, engineered the bailout to save themselves billions (AIG owed them billions, so our bailout of AIG was a bailout of GS), and do it all at the expense of taxpayers.

Rolling stone got it right: The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

Buk Nasty

November 18, 2009 11:45 AM

We are l fools. If you do not lie, cheat, steal or bribe your way to the top, then you are cleaning the floor. The only true help is a flat Federal Sales Tax for all. No deductions, no allowances, No Income Tax. Fair is Fair.

Tracey DeLeeuw

November 18, 2009 2:57 PM

This is great news and I suspect - the start of something. Wall St. is competitive - I eagerly await the news of matching initiatives from other Wall St. players.

If you google small business recovery plan - and click videos - you'll be introduced to my company. Like Goldman Sachs- is doing its part to help small business. We hope to host the economic recovery for small businesses who need to do more with less.

Tracey DeLeeuw

Frank Fitton

November 18, 2009 8:52 PM

The $500 million though is really a drop in the bucket compared to the kinds of numbers this company throws around. Its almost insulting in a way, but at this point we are the dog underneath the table and are willing to take whatever scrapes these people want to toss our way.

So are we supposed to get excited about this? I wouldn’t exactly say that, but I wouldn’t completely scoff at it either. They didn’t have any reason or were mandated to do this in anyway. Of course its a blatant PR move, but its not a bad one. Its really in their best interest too for as the economy soars so do their profits. Its really just a win win situation for everyone involved. Some more money possibly in line with the kind of money they’ve been paying out in bonuses would have been nice, but who are we really to complain.

I don’t really blame Goldman Sachs for the financial crisis, they were simply going about their businesses. Looking back at it, things could have been done differently of course, but hindsight is always 20-20. Its refreshing to see someone step up to the plate and admit that they didn’t handle things as well as they could have. Is it sincere? Probably not, but at this point its all we’re going to get and its better than nothing.

Check out my blog on the Goldman Sach's penance offering at....

primo iglesias

November 18, 2009 9:07 PM

At the end of the day s it really going to make a difference? I don't beleive this will be the case. This is Goldman's way of repenting so they can say to themselves, "we've done good, so our sins are forgiven"! HOGWASH!
Once a criminal, always a criminal! Nothing is ever going to change at GS.


November 18, 2009 10:09 PM

This is NOTHING! These bandits have INVENTED trillions - TRILLIONS of dollars worth of VAPOR VALUE through their development and abuse of the derivitives market - and in turn have put the entire global economy at risk - and they think giving away a pitance $500 Million is newsworthy! And wll while they give themselves $16 Billion.
Get Real!


November 19, 2009 3:06 AM

Goldman Sachs wants to appear nice. Too late, most people look through these fogs and mirrors.

GS only wants to make profit at any cost to society. They are now working to build the next bubble in agriculture and food. How many people will starve to death because of it? For their profit´s sake.

What´s a predator to do?
As long as we allow them to wreck havoc with our economy and even throw our tax money into their greedy throat, we have no one to blame but ourselves.


November 19, 2009 9:56 AM

I want Start a new smsll business but the problem i have is lack of fund, So my question is can you support me financially?

Katherine Warman Kern

November 19, 2009 11:30 AM

Now that Goldman is a bank, it is required by the Community Reinvestment Act to fund these programs. So is this fund incremental to their CRE requirements or to meet them?

Katherine Warman Kern

Joan Mitchell

November 25, 2009 11:21 AM

One way to help small businesses succeed is to ensure that their owners and leaders are able to get the education they need. Western Governors University, a non-profit, online university that offers bachelor's and master's degrees in business and information technology, has launched a new scholarship program for small business owners and employees that provides up to $3,000 toward tuition and fees for as many as 30 qualifying students. The scholarship program is competitive; for more information, go to

Greg Zwick

November 27, 2009 1:16 PM

WOW! 500 Million to small businesses (and 20 Billion in Employee bonuses)


December 25, 2009 11:59 AM

You look at other countries and you see how there government is outright corrupt. Well America is no different, its just funneled through corporate America. These large companies have their hands in the governments pockets and government is taking billions in kickbacks to give them the green light to do whatever they want. If cigarettes kill why are they for sale? In other countries cars run off alternative fuels like Brazil, why we so dependent on oil? More then half of Hawaii is Solar why not the rest of the country? GOING GREEN is the next big scam but corporate america is going to make billions and the government is going to enforce it. So if you cant beat them join them and buy stocks in this field now and make $$$$

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What's it like to run your own company today? Entrepreneurs face multiple hurdles new and old, from raising capital and managing employees to keeping up with technology and competing in a global marketplace. In this blog, the Small Business channel's John Tozzi and Nick Leiber discuss the news, trends, and ideas that matter to small business owners. Follow them on Twitter @newentrepreneur.

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