iblv editorial:

Boosting small biz

Federal strategy to free up loans would help companies, workers

Fri, Nov 6, 2009 (3 a.m.)

One of the best ways to measure just how tight credit has become in Nevada is to look at the precipitous drop in federally backed Small Business Administration loans made to companies.

As reported by Nicole Lucht in last week’s In Business Las Vegas, SBA loans in this state plummeted from $277 million in fiscal 2007 to $117.3 million for the fiscal year that ended Sept. 30. The loans come in handy both for existing businesses looking to expand or buy equipment and for entrepreneurs seeking start-up funds.

The tight credit market, though, has made it virtually impossible for small businesses to grow or even meet payroll. That is one of the main reasons Nevada has been stuck with a double-digit unemployment rate.

As Las Vegas Chamber of Commerce spokeswoman Cara Roberts aptly told Lucht: “There’s frustration in the business community, particularly for small businesses that need to access credit to sustain their business or expand their business.”

To help free up credit, President Barack Obama announced a strategy in October that could assist companies in obtaining loans. His administration plans to make it easier for community banks to tap into federal bailout money at low interest rates if they agree to increase lending to small businesses. Obama also encouraged Congress to increase the maximum amount of loans available through the SBA.

Obama made a sound argument for those initiatives when he said that small businesses generated 65 percent of the new jobs in this country over the past 15 years. It stands to reason that Southern Nevada would greatly benefit from the president’s proposals.

A major failing of the federal Troubled Asset Relief Program is that the bailout of major banks has done little to help small factories, restaurants, grocers and other retail merchants. Hopefully, this oversight will be rectified quickly.

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