White House Says Small Biz Recovery a Work in Progress

Posted by: John Tozzi on May 16, 2011

Small businesses have begun to create jobs, White House officials said today, though the recovery is not as robust as they would like. The White House released a report today detailing its attempts to aid small business owners, part of the Obama administration’s effort to counter charges that it is anti-business.

“There’s very little question that small business is now once again contributing to job creation and helping to lead a job recovery that is strengthening, but we would still like to see much stronger,” said Gene Sperling, director of the National Economic Council, on a conference call with reporters this afternoon. “We feel very strongly we have come a long way, and that this economy still has a lot further to go.”

The 78-page report consolidates the small business policies of the Obama administration, including tax breaks, efforts to boost lending, and support for exports and expanded government contracting. Sperling and Karen Mills, head of the Small Business Administration, pointed to 17 tax breaks for business owners, more than $50 billion in federal loan guarantees since 2009, and federally-supported programs that have provided counseling to more than two million business owners.

The pair also said the administration is working to streamline regulations for small businesses, a goal Obama announced early this year. “We went to all quarters of the country, convened small businesses…and we got very, very strong and specific feedback on which areas [of regulation] were causing barriers for entrepreneurs to grow their business,” Mills said. In one example, Sperling said, the Department of Defense is trying to speed up the time it takes to pay contractors to 20 days from 30.

Among the president’s highest profile small business initiatives is a $30 billion lending fund that offers community banks low-cost capital if they increase lending to small businesses. Sperling said the fund has received 645 applications seeking $9.62 billion. Some banks that received money through the Troubled Asset Relief Program are swapping their TARP capital for money from the new fund.

Small businesses have reported flagging sentiment in recent months. The National Federation of Independent Business’s optimism index remains at recession levels. Sperling and Mills acknowledged the breadth of the problem. “There was not a single silver bullet that was going to address the needs of all small businesses,” Sperling said. He said the administration tried to “attack this problem at all fronts,” beginning with the stimulus package passed in early 2009, last year’s Small Business Jobs Act, and efforts this year to reduce regulation and bolster high-growth ventures with the Startup America campaign.

Reader Comments

Geoff Gordon

May 17, 2011 4:18 PM

These government workers think they understand small busienss, but they don't.
We don't employ gangs of quantitative analysts to navigage the federal give-aways: we're simply trying to compete for consumer's dollars.
When I see the depth of penetration into business practices in so many industries by government, I see the death of innovation. Government workers take this duty seriously: protect the consumner from making stupid choices. Their solution is to dictate business practices. Death of innovation, anchors on productivity. Protect mediocrity, penalize success is this administration's theme.

Obama is still in denial over the need for tax revenue deep into the middle class to pay for all the new programs and free health care he wants to give out. We all know our taxes have to go up to pay for all these freebies, so why the denial? What he proposes is mathematically impossile, and anyone who's informed knows it. Soaking the rich is a great campaing theme, but it's not much of an economic platform.

Chuck Blakeman

May 17, 2011 10:25 PM

Until the SBA embraces a reasonable definition of "small", all claims that they help small businesses simply cannot be believed.

The SBA defines "small" as "less than 500 employees". This includes 28 million out of 28.1 million businesses in the U.S. (only 18,000 do not qualify), a constituency so broad as to be meaningless. It's no different than defining all people under seven feet tall as "short". It is 99.93% of all businesses in America.

Why so broad a definition?

So politicians, giant banks, and even the SBA can continue to claim they are focused on helping small businesses while totally focused on larger companies with more political donor power.

The SBA's Size Standards white paper says it is "utterly impossible" to define the size of small business, then they go ahead and do it at 500 employees. The European Union has universally defined it at 50, and "Micro" businesses at 10. in 2009 Australia passed the Fair Trade Act defining small business as less than 15 employees.

Apparently it's not impossible, but it is definitely inconvenient for those like the SBA, big banks and big government who regularly trot out companies of 50-500 employees and claim they are helping "small" business.

The media needs to stop allowing the SBA, politicians and banks to simply feed them unproven claims of small business support without requiring that they first define the size of companies they see as "small". Until we have full disclosure on what size companies actually got the help, these claims should fall on deaf ears.

Big is not small and the SBA has a responsibility to stop making claims without a meaningful definition.

Diane T

May 24, 2011 4:41 PM

You are both so correct! My business has 15 - 20 employees and 2 locations. We are notified of all these programs that will "help" us (one of our owners is a SCORE rep), but the only thing we have qualified for has been the Health Insurance Credit. Thank goodness we are an S corp.

TJ Mollahan

June 1, 2011 7:59 PM

I too am in agreement with Geoff and Chuck. Small business relates not to the size but to a paradigm. It is in understanding the dynamics of the paradigm that will bring about “assistance”
Small Business Paradigm
Small business is not always easily defined but can be identified. In identifying small business it is helpful to address three areas beginning with how businesses develop, capital requirements, and how the needs of the small business market place are served. Small business is small business because large business has determined that pursuit of such a market is not worth the effort. Large business by nature pursues opportunities that require larger capital investments and yield minimal fluctuation. Small businesses by nature pursue opportunities that require a smaller capital investment and have higher market fluctuation. Consequently many of the opportunities that will exist for a small business have demands that fluctuate and exist in markets that are inherently more risky.
TJ Mollahan - ShyEntrepreneur.com

work at home

June 9, 2011 4:30 AM

Great information about the business,And You are both so correct! My business has 25 - 30 employees and 3 locations.We are notified of all these programs that will "help" us.There’s very little question that small business is now once again contributing to job creation and helping to lead a job recovery that is strengthening, but we would still like to see much stronger.

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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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