Little Joe Plumber …Pipe Dream? Down the Drain?
Small business owners like Joe the Plumber are sitting on the edge of their seats these days, as they await small business legislation from the new Obama administration. To quote Rhonda Abrams from USA Today, the average life span of a Fortune 500 company is only 40 years, but the future of America depends on small and new business. So what do they need going forward? More paper! Meaning, of course, fresh money and laws that will allow them to grow and compete with larger, more established businesses and industries.
According to the Obama Biden plan for Small Business (view it here), the new administration will look to cut health care costs and improve access to capital and investment in innovation and development. It might be easier said than done, though; how quickly can the details of the plan be implemented at a time when small businesses are likely to begin tumbling like dominoes due to the frozen credit situation?
According to Ann Meyer of the Chicago Tribune, there is hope. She reports that Obama plans to expand the Small Business Administration’s Disaster Loan Program to make affordable loans available faster, while increasing the government’s guarantee rate on 7(a) and 504 loans to encourage private banks to lend to more start-ups. And in an interview with an SBA administrator, Patrick Rhea, he tells her, “It’s real possible that SBA loans will be the first ones banks start to make as the market starts acting less cautionary…. we are talking to the banks now almost around the clock on every avenue so that we can encourage them to take a chance on start-ups through loans and lines of credit.”
But small business owners should be prepared to make a good case for their business when they go for a loan. Tribune’s Meyer also interviewed a regional director for business banking at Green Bay, Wisconsin-based Associated Bank, Mark Rojas, who said that lenders were being very cautious, and that “these days, you’re not only making a credit case, you’re making a business case”.
Ultimately, small business owners need to work to establish good credit before approaching banks, and one way they can do this is to apply for business credit cards and use them responsibly. Regardless of your credit score, you can still shop and apply for business credit cards that meet the needs of your company, and today it can be done quickly and easily on sites like SmallOfficeCredit.com.
