Is the Economy Killing Small Business?

to the leaders

To :Presidential Candidates Obama & McCain

Cc: To the rest of our Leaders

As we continue to watch the economy in turmoil and watch as people worry about today not the tomorrows. We continue to get the political bantering and talking heads. My question and in some instances pointed observations from one 56year old business owner that is sinking and not finding any options anywhere. Where is the help for us and our families and our employees.

It is small businesses that grows this nation. But yet what we hear about is the big business scenario. We allow companies to file bankruptcy with big names, however we allow small businesses to be lost in the paper mill and watch these companies go bankrupt and call it a shame or they( the business owner had no business ethics). We allow companies to move and hide under the shield of protection when the small business owner can not. We our called bad business recipients because we can not get loans to help bolster our situations until the economy frees itself up. Yet again the Big companies with the big names will get the funding, based on what. There CEO’s receive bonuses and perks, and all the small business owner receives is denials for credit because they are seen as a credit risk.

There was a time when small businesses could get loans from banks at good rates, banks now see small business as a negative, as a small and bothersome issue that banks could no longer lend to. Thus you turn to credit card companies who were in many ways vultures, by allowing good rates to business owners to start with, yet as the economy conditions changed, these same companies sent interest rates to people that were paying 7.5 or 9%, to now double digits in the 17>21% rates in interest alone, thus putting more burden on cash strap employers trying to weather the storm and keep employees working and food on peoples tables. When you ask these card companies Advanta, Wells Fargo, and numerous other card institutions there logic in why your credit is higher now? Because you have borrowed more, your paying your bills on time but you’re a risk based on what? The same risks that the major industries are taking, yet small businesses do not get the big industry look? Higher interest rates mean larger payments on an already fractured system that many companies are dealing with. By raising interest rates like this businesses are being forced into bankruptcies’, not helping the economy. Small business owners are paying more for the same money that was borrowed when rates were good and now paying higher interest rates for old paper. How does this help anyone?

Of course we did we like any business we our trying to make ends meet were trying to survive, many of us(business owners) have profitable enterprises that our showing in the red because of payment structures that are sending us scrambling. Some of us may have had a project or sale that went awry, and were trying to recapture losses. Which is part of business. All companies suffer losses, and many startup companies suffer greatly there start up years. But again these companies have business that can grow but not the funds to continue. When should be lowering rates and taking on the small business owner. The Banks turn there heads and say no! When you ask why you are told that you’re not high enough on their standard. Banks all tout the bad decision phase that banks went thru as their reasoning. Yet when pushed harder you’re also told that if you had land or a plant maybe or big equipment we could loan you the money.

Well of course we understand this in an enterprise system. However we are truly in remarkable times when you will not have equipment, you will not have land you cannot buy anything because , you cannot get loans to get your company going. Small business through out this country deliver back to the economy the following:

Small businesses are job creators. Office of Advocacy funded data and research shows that small businesses represent 99.7 percent of all firms, they create more than half of the private non-farm gross domestic product, and they create 60 to 80 percent of the net new jobs.

In 2004, there were an estimated 23,974,500 businesses in the U.S. Of the 5,683,700 firms with employees, 5,666,600 were small firms.

The latest data also show that in 2002:

• women owned 6,492,795 firms;

• Blacks owned 1,197,988 firms;

• Hispanics owned 1,574,159 firms;

• Asians owned 1,105,329 firms; and

• American Indians and Alaskan Natives owned 206,125 firms.

In 2004, there was strong growth of 7.3 percent in proprietor's income -- a partial measure of small business income. Business bankruptcies decreased by 2.1 percent and self-employment increased by 2.2 percent. This and other data for each state and territory are available in individual economic profiles on the Office of Advocacy website at http://www.sba.gov/advo/research/profiles.

Source: Small Business Drives U.S. Economy

Provides jobs for over half of nation's private workforce

By Robert Longley, About.com

WASHINGTON, D.C. -America’s small businesses continue to drive the U.S. economy, according to the updated 2005 Small Business FAQ, released today by the Office of Advocacy at the U.S. Small Business Administration. The updated FAQ compiles the most recent and important small business statistics in a useful and easily understood document.

“The 2005 Small Business FAQ is a great resource for small business people, policymakers, and anyone interested in how small business drives our economy,” said Dr. Chad Moutray, Chief Economist for the Office of Advocacy. He added, “These statistics paint a compelling picture of just how important small business is to America. They show that small businesses are America’s job-creators, innovators, and the path to mainstream economic activity for all segments of our society.”

Small business statistics highlighted in the 2005 Small Business FAQ include:

•Small businesses represent 99.7 percent of all employer firms.

•Over the past decade, small business net job creation fluctuated between 60 and 80 percent.

•Small businesses generate more than 50 percent of the nonfarm private gross domestic product (GDP).

•Two-thirds of new employer establishments survive at least two years after start-up, and 44 percent survive at least four years.

•Small businesses employ half of all private sector employees.

•Very small firms with fewer than 20 employees spend 45 percent more per employee than the largest firms to comply with federal regulations.

•Minorities own 4.1 million firms that generate $694.1 billion in revenues and employ 4.8 million workers.

•Women own 6.5 million businesses that generate $950.6 billion in revenues, and employ 7.2 million workers.

•In 2004, an estimated 580,900 employer firms opened while an estimated 576,200 closed.

The Office of Advocacy, the “small business watchdog” of the government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats and it funds research into small business issues.

For more information and a complete copy of the 2005 Small Business FAQ, visit the Office of Advocacy website at www.sba.gov/advo.

Source: NEWSRELEASE

For Release: October 3, 2005

Contact: John McDowell, (202) 205-6941

john.mcdowell@sba.gov

SBA Number: 05-46 ADVO

Press Kit

Oh but did I forget to tell you that GM which is bleeding red can get billions in loans on concept cars and property that if they were to go under, would sit empty and eventually fall apart. Job loss age is always shared with the big name companies. But if you dig deeper and help the small business owner you also can generate income, you can generate those that will go out and spend. Maybe I’ve simplified this too much for some. Tax accountants everywhere will have their hair bristle.

However what about those companies that were laughed at yet made it. And how did that happen? Because are banking system listened to the concept, listen to the business owner, that yes may have been bleeding red but finally got it! That company made money which supported the industry they were in and had employees, those employees went and spent money on other items that those companies employees went and bought other items……..and soon the economy started to roll very slowly out of the train station, to simplified for our college and political brilliant minds still?

I truly hope not! We give billions to banks and they do nothing with the money. Oh YES! The stock holders. Forgot about the 1% of the stock holders in the companies that actually push the buttons, telling boards to not do anything to hurt the balance sheet more. So where does the money in the rescue plan go? Not out on the street that’s for sure but sits to make the sheets for the stock holders look good. When will government look at these numbers, your banking partners will not lend to SMALL BUSSINESS? Yet small business will drive the economy. Companies need to roll back prices stop trying to make ground up in chunks. Stock Holders have to wise up and allow the economy to grow again in small pace rather then this quick jump start that everyone is touting.