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The SBA Throws a Party, but Some Innovative Thinkers Don’t Show Up . . .
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As a regular reader of all-things-Mercantile, you’ve probably noticed I’ve been busy putting forth countless ideas to help America’s small businesses grow better, smarter, and faster. I’ve been advocating for the most important employer in our economy for several years (the small business owner), but things have really heated up over the last few months. The Small Business Administration (SBA), for instance, has probably been mentioned more times in the media in the past year than it has cumulatively in my lifetime. And while some of my real-world suggestions have finally been adopted by our elected officials (long after I proposed them, no less), others that SHOULD be put into action are still languishing. (You can see my most recent stab at offering even more solutions to stimulate the growth of small and mid-sized businesses in my Thursday, October 22nd post titled “SBA Loan Programs Need Bear-Grylls-Like Help”).

So yesterday, Treasury Secretary Geithner and SBA Administrator Mills hosted a conference on how to give American small businesses better access to capital and help them survive this rather unpleasant economic downturn. A very small sampling of “representative” business owners were handpicked and no-doubt, carefully screened to participate in this discussion . . . as were various politicians and lobbying groups making sure they were “seen” standing up for the “little guy.” According to one account, the attendance totaled just seventy (70) people.

Now, there will probably be several headlines today from various media outlets about how “informative” and “constructive” the conference was, but I’m choosing to label it a “party” in my headline above, since I don’t think much real business will come of it. Just like in a real party, I’m sure it was heavy on socializing, but light on problem solving (particularly if there’s a well-stocked bar nearby). Now, I really am optimistic about the event . . . as optimistic as a cynic like me can be. BUT . . . The rub (there’s always a “rub” isn’t there?) is IF any of the ideas they dreamt up actually get implemented. Public policy, like business, is ALL about execution.

Truth be told, I have a slight problem with this so-called “forum”: far too many were conspicuously NOT invited. Seventy (70) people?!? That’s ALL they could manage for this critical event?!? Where were the top 200 SBA lenders? Where were the top 25 SBA-related “sources” for the media? Did the organizers look up and invite the award recipients from the last 5 years’ worth of annual SBA awards? Did they invite ANY of the Inc. 500 or 5,000 winners over the past few years (those that are the fastest-growing privately-held businesses in America)? (By the way, ANY of the above criteria would have rendered us at Mercantile an invitation). I’m sincerely wondering out-loud here IF the right people were EVEN THERE?!?

How can you host a conference on improving access to capital for small businesses in the worst lending environment of the past 50 years (or more) if only a handful of the “movers-and-shakers” of the industry are there? If the most innovative small businesses in America aren’t there? If it’s only a select bunch? AND, if it only attracted 70 people?!? And where did bipartisanship go, by the way??? Isn’t this an AMERICAN crisis that needs input from ALL angles and sources regardless of political bent? It pains me to state the obvious, but shouldn’t there have been hundreds (maybe thousands) of people at this event – – overwhelming the facility they hosted it at? Shouldn’t it have been billed as one of the most critical meetings in Washington this year – – be there (and stay for the whole thing) or you’re really not part of the solution, you’re just part of the problem? Shouldn’t our President have been standing on the podium at this conference instead of standing on and sightseeing at the Great Wall of China???

Let me put some “meat on this bone” for you: someone who communicates regularly with nearly 90,000 active small business owners and their advisors, for instance, wasn’t invited. Someone who regularly gets dozens (sometimes hundreds) of blog comments and responses about matters that concern the small business community wasn’t asked for suggestions. Someone who’s appeared in such varied media as FOX Business News, the New York Times, Inc. magazine, BusinessWeek, Entrepreneur magazine, and SmartMoney – – all just this year – – the Administration didn’t even reach out to him. That someone, of course, is me . . . and since you’ve read this far . . . it probably also means they aren’t paying attention to YOU either. Perhaps I could have been a helpful advocate yesterday.

Here’s the irony: I was near Washington earlier this week; I could have been there. From Monday through Wednesday, I was there helping to create 5 to 7 jobs over the next 6 months — well-paying jobs, too (above the American average pay) – – with my new Rockville, Maryland franchisees of my Kennedy’s All-American Barber Club (you can get more details at www.KennedysBarberClub.com or go visit them at 110 N. Washington Street in Rockville). I was in town, practicing what I preach about entrepreneurship – – walking my talk.

Isn’t it ironic that an entrepreneur like me was up there helping a couple of other entrepreneurs get their business up and running . . . entrepreneurs who would probably open more locations (creating even more jobs) immediately if they could just get the financing they needed (at Mercantile, we won’t finance ANY Kennedy’s as it would be a potential conflict of interest – – yeah, I know . . . nice thought, but no). As it stands, they’re going at it with their own hard-earned cash . . . and as this Club becomes successful, they’ll open more – – but that may take longer than any of us really wants it to.

All I can say is that it appears certain folks in Washington LOVE jobs, but HATE employers . . . that, and they’ll do anything for a photo-op. At least the theme of yesterday’s conference was ACCESS to capital, NOT the COST of capital — which so many of these same folks (not in the trenches everyday) thought was the big problem since the start of the Great Recession. Think about this for a minute, if you would: what could we have REALLY done with the $3 trillion that’s been spent since the global financial crisis started? Can you imagine, for instance, how things would have recovered if income taxes would have been suspended for one calendar year? And that would have cost much less than the $3 trillion that’s been spent (some squandered) so far.

We really ARE facing a crisis in the small business community, and it requires IMMEDIATE ACTION. When the “too-big-to-fail” companies needed stimulus and support last fall, it was government-to-the-rescue. So what about the crisis you and I and about 27 million others are facing now? Where’s the action? There are many, many more small and mid-sized businesses in America than there are great behemoth companies, and our economy depends vitally on us – – we just don’t have the lobbying clout they do since we’re so fragmented and fractured into so many different industries and niches, as I’ve discussed in this blog previously.

What will the Administration do when more of these companies – – the true backbone of the American Economy – – finally give up? Sadly, we may actually find out. A USA Today poll you might not have seen yesterday was truly scary: 52% of America’s current small business owners don’t think they’ll be in business in 2010 and 2011!!! I’d call THAT a crisis . . . sure it’s just a poll and they’ve been known to be “off” a little sometimes, BUT I think that ought to give some insight into what’s really going on out here in the “real world.” It’ll take a lot more than just 70 people looking nice in their suits for the cameras to solve it.

Dedicated to Fighting for YOU and ALL of America’s Small and Mid-sized Businesses,

Chris

P.S. Perhaps one voice just isn’t going to get through to them – – maybe we need more people shouting to get the Administration’s attention. Take a few minutes today or tomorrow to write your Representative in Washington to push for REAL Action – – like some of the things I’ve been writing about here for the last several months. Maybe we can actually fix some things if we pester them enough. Maybe.

P.S.S. And don’t forget, when you need commercial property financing, you SHOULD know where to turn to now. Yes, we’re still lending . . . so give us a shot on the next deal you know of. Not EVERY commercial lender in this country has turned their lending spigot off. Ours is still open. And I’m pretty sure you’ll I even ENJOY the lending experience with us . . . something that can’t be said about most lenders.

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15 Comments

  1. Bruce Batstone says:

    Chris, I would like to speak to you on many topics including the financing of my eco green resort project in Orlando. Please send me info for direct contact or email me with some options
    Have a great Holiday, and good work!

  2. Charles Brandt says:

    Hi Chris,

    Keep up the great work. If enough people read your blog maybe we will see some business activity!

  3. Shy DuReaux says:

    As the Executive Director of The National Black Business Trade Association and a Broker assisting small businesses with the help of MCC, I would first like to echo your comments about “whether” the right people were at the party! Obviously not,your tireless efforts on behalf of small biz America put you in a unique position to at least give insight into the problem. The challenge is to get invited!!! There seems to be an opportunity here to position the work that is being done with the “desire” of those who say they want to do something about.
    Having produced business expo’s in over 20 cities with more than 5 million people through the front door over a 10 year period gives us some insight into the problems entrepreneurs are facing. ANYTHING that we can do to be of assistance, we are willing to do. NOW is the time, We are the ones who have been given much, therefore much is required.

  4. Suzan says:

    SBA it is impossible now, I know cerement try to help, but that will never happen as long is the banks refused.
    Bank will never approve you unless.
    1- You have a very height income (not just income, have to be very height)
    2- If you want to buy a business, this business has to be successful 100% or more if it is possible.
    3- You can’t start up any business. It has to be established with last 3 years tax return with a lot of profit
    4- No matter how is your credit score (my score is 820) and no matter how is your education (I have MBA). And it doesn’t matter if your business plans excellent. Or how much the down payment.
    And So and SO and SO.

    It is not a real any more you can do SBA if you have all amount in cash (it doesn’t make any since)

  5. Andy Kron says:

    Chris,
    Why do you sound supprised.
    Lets keep pushing the 504 program, it’s
    the best road for small buisness

  6. Mike says:

    2007 INC 500 #297 here with my thoughts.

    2005, 2006, 2007 – those were the good old days, right?

    Making money, spending money, growing our business’s, bank’s offering us big credit lines, and handing out copies of INC magazine to anyone who would take one from us, with our own page ear marked of course.

    In case you did not notice no one is going to bail us out. That’s right – no Obama money for us!

    In my opinion no one really cares enough about the guys who employ 10-30 people enough to offer us a hand when we are in need. Everyone wanted to help before when we were making money, now when we actually need help it’s just not there.

    Cynical, maybe a touch these day’s – however I can tell you I am not giving up… and when things do turn back around I will be the first to tell the wankers, I mean bankers to get lost.

  7. Mike Culhane says:

    Chris:

    This administration is not interested in small businesses because they’re interested in the socializing of large corporations (see Auto industry). In fact, the only interest they have in SB’s is taxation, which will force a good deal of these entrepreneurs to close thier doors and put even more people out of work. The Emperor has NO clothes and the everyone is too afraid (not yourself) to speak up about it. That “party” you spoke of was just a way for them to mail it in and check the box on the growing SBA crisis. Are there any good economists in this cabinet? For a real great view of how this country’s economics should be “allowed” to perform, read anything but the wonderful economist, Thomas Sowell.

    Keep up the rant…and thanks.

    Mike

  8. Mike Giles says:

    Chris,
    Thanks for ANOTHER great post. The “party” in D.C. Wednesday looked and sounded like just another orchestrated photo-op with lip service. The Too Big To Fail have the money, they don’t want to share and aren’t compelled to share. Meanwhile many SMB’s are struggling, some dropping like flies and it’s a potential domino effect. Although, we’re somewhat sheltered from the storm here in Greater Boston, it’s still pretty ugly. Action Now is required.
    This quote from a small business owner featured in CNN story says it all: “We were really frustrated and tried many national banks … We heard Obama talk about helping small businesses and the banks received billions, but there was a huge disconnect between the words from the top and what was actually happening.”
    One sliver of a silver lining for tenants and buyers is that today is a great time to be on the Demand side of the CRE market, whether leasing or purchasing. Opportunities are plentiful to benefit with either a blend/extend, or a flight to quality, to better space for similar or lower rent. In many cases the rent achievable is 20-30% less than just 12 months ago, sometimes as much as 50% less as in the case of a sublease opportunity.
    By the way, you should have just crashed the party! (that could have been very gk outrageous)
    Look forward to your next update. Mike
    OfficeTenantAdvisors.com

  9. Brian D. McGuinness says:

    Sounds good Chris

    You have always been ahead of the curve

    Tell Dan Murphy I said hello next time you speak with him

  10. Erick Cerda says:

    I couldn’t agree with you more and your views on the lack of help from the government and the banking industry for us small business owners is a travesty. But guess what it will never come – stop waiting and take action.

    This crisis has brought about some positive experiences and circumstances for many people. For example, I have redirected my focus to mending my mind. If I am able to work on making my mind work for me and with me instead of against me, I think I will be a much more useful instrument for contributing to this eroding world and hopefully assist in making it a better place for our future generations. If we can teach people how to think and have the mind, body and soul to work in concert, we wouldn’t have to discuss and disagree about government hand-outs or SBA or any of those by-products of the an infected mind.

    I am beginning to learn much more about Eastern philosophy and enlightenment. And the one principle that we should adopt is to stop the fight and stop creating war and opposition to everything we don’t want or like. Instead, create a movement for the things and circumstances that you do want.

    I for one am doing my part with my company. I help people who are having a tough time affording their mortgages to stay in their homes stress-free. Because I believe that the foundation of everything else we want to teach people has to start with a base – a comfortable place to sleep at night.

    I would like to discuss this and other topics with you at some point soon.

    Thank you and do exactly what brings you joy,

  11. Gerald D. Shotts, Jr. says:

    Chris, you are right on target AGAIN! If you’ve read the recent Job’s Creation by State info, the adminstration is bragging about creating jobs in in Florida — Which only has 25 districts. I submit the following from one of our Congresswoman:

    This Just In: Florida Now the Largest State in the Union…
    ….according to Recovery.gov **

    Washington, Nov 17 –

    Washington D.C. – After reading the wildly unsubstantiated claims President Obama is making about the success of the stimulus, U.S. Congresswoman Brown-Waite (FL-05) went to Recovery.gov to see for herself how a trillion dollars is being spent:

    “At home in my district, my constituents are crying out, ‘where are the jobs, where are the jobs?’ I wanted to see for myself where the trillion dollars in taxpayer money had gone. I visited the White House’s website dedicated to the stimulus bill; Recovery.gov. I was alarmed to see that Democrats have spent $3,582,587 to create 5 jobs in Florida’s 86th congressional district. In the fighting 53rd they spent $460,000 of your taxpayer dollars to create zero jobs.

    “The truthiness of the President’s claims is mind boggling.

    “How can we expect the administration to run Stimulus when they can’t even run a website?”

    A partial screenshot is attached. To view the full page, click here.

    ** At least until the next census, Florida only has 25 Congressional Districts

    Chris, please not that we only have 25 districts in Florida. Keep up the great work and thank you for all that you do for our Country. God Bless American!

    Warm regards,

    Gerald D. Shotts, Jr.

  12. Bob Staniforth says:

    Chris: How is this for economic stimulus . . .I am on the legal board of a 450 million dollar community bank in St. Louis . . .the community banks can really only make money in commercial real estate loans . . .it is a very challenging time . . . the regulators want all the banks to raise capital and reduce the number of commercial loans they have even if the borrower is current and has never missed a payment!……..now . . . here is the latest . . .as you know FDIC insured accounts had a limit of $100,000 . . .the FDIC raised the limit to $250,000 . . .this insurance is paid for by the member banks through annual premiums . . . our little bank’s premium went from about $180,000 a year to $400,000 a year . . . due to the high rate of bank failures to date . . . and the likelihood of many more failures . . . the FDIC doesn’t have an adequate reserve to handle these failures . . . so . . . what do they do?…….they are requiring member banks to PREPAY 3 years of premiums, due prior to Jan 1 2009 at rates which depend on the institutions “CAMEL” rating . . . our little bank has to pay $3,000,000 for this mandated insurance premium . . . this is happening to every bank in the country . . . do you think this may have an effect on capital lending . . . keep doing what you are doing….maybe someday someone will listen before it’s too late . . . thanks…Bob Staniforth

  13. Sam Cox says:

    Hello Chris,

    I haven’t followed your blog as closely as some. There are points you make that I agree with and then there are those that sound like the rant of a madman. As for how this recent conference or forum with Treasury and SBA was conducted or organized, my understanding is that there is still a comment period available before the final report is drafted and submitted to the White House.

    Try going to
    http://www.smallbusinessfinancing@sba.gov or
    http://www.smallbusinessforum@sba.gov (couldn’t read my own notes when I got back in) and give them the benefit of your experience with the 504 loan and banks over the last couple of years. Most of your readers are not in a position to effect any changes. The people in office appear to finally get it that they need to listen to main street also.

    Don’t stop doing what you do.

  14. Braudis Lee Pegram says:

    Yes Chris, keep up the good work. And Sam, the correct url is http://www.sba.gov/smallbusinessforum/

  15. Jossette says:

    The Socialist Party, I mean the Democratic Party Plan for this country is to put over 50% of the population out of work and stifle small business. Then all those unemployed will be on government money (food stamps, unemployment, welfare, government housing, etc…) and will vote for the Democrat Socialists for the next 50 years. Hail Obama!
    I’m doing all one person (with no money) can do as far as voicing my opinions to our Representatives and Congressmen, but EVERYONE needs to speak up and make their voice be heard! And those of us with money need to put their money where there mouth is.
    Keep up the good work.

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