Sunday, June 21, 2009

No bailout for small businesses

The bad economy is choking all of us lately, but small businesses are definitely taking the brunt. Just a short drive up any of Tampa Bay's main arteries tells the story: blank storefronts and "For Lease" signs.

In Florida, small business accounts for more than 80 percent of the economic engine. But in the skinnier days of late, the shoppers dedicated to spending their money locally have tightened up their belts. Unemployment rates just rose to 10.6 percent this month in the Tampa Bay region, translating to about 140,o0o folks without a job.

Local small business have seen their customer base shrink, and some have turned to banks for loans and credit extensions. Problem is, the money's just not there anymore.

So where is it? The government gave the big banks $700 billion in bailout cash to free up credit. That's billion with a "B." But the rescue money did just the opposite; instead of freeing up credit for flailing small businesses, banks are using it to buy other banks. Lack of credit has become an agonzing hurdle for local businesses needing relief to survive, much less grow.

But lending institutions are tightening their standards, lower credit lines and hiking up interest rates. The trend lately has been to deny loans to small business unless they can back it with commercial real estate holdings and the borrower is asking no more than 70 percent of the value.

Impossible standards. Where's the bailout for our local businesses? If we drive 80 percent of the state's economic engine, why aren't our voices heard? Since the credit crunch is propelling this recession, then more relief is needed downwind here where we really feel it, unstead of padding the big banks.

These indeed are scary times. We can pitch in by spending locally, buying locally, and keeping our jobs local. Until small businesses get the chance to grow, our economy unfortunally is going to continue dragging.

1 comment:

jv said...

For months now Banks -Credit cards-Financial Institurions have been closing the accounts of small business. Business that have good credit amd established credit for years with no explanation results have forced the companies to close or layout employees .... I have been talking about this situation 3 months ago on
Localshop1 social network and have suggested to form a lobby of Small business companies around the nation so we can have a voice and get some help We have to keep this segment of the economy alive .....
SBA ( Small Business Administration ) has not helped and can not help financially

Hangman

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