Bailout Help for Small Businesses?

When the federal government rolled out the $700 billion Troubled Assets Relief Program (TARP) to stymie a complete collapse of the economy in October, its first priority was big business and large capital banking.

Now a cross section of democrat and republican law makers – in particular John Kerry, Charles Schumer, and Olympia Snowe – are calling on Treasury Secretary Henry Paulson to start opening up bailout bucks for small business owners.

Those championing the small business cause are warning Paulsen that neglecting the main street sector will cost the economy in terms of employment and bankruptcy.  An influx of cash flow to small businesses would be an immediate relief since government-backed SBA loan programs are currently frozen.

To further push Paulsen’s hand, Schumer has introduced the 10 Steps for a Main Street Economic Recovery Act which strengthens the Treasury’s authority to purchase SBA backed securities in the secondary market. The key leaders in this cause, Schumer, Kerry, and Snowe, are making a public appeal in their quest to clear obstacles and excuses in securing small business relief.

Small businesses in particular have been paralyzed without a constant source of liquid capital which is a must for everything from paying the power bill to meeting payroll for the next project or product.  With the slow down of the economy, small businesses have watched reserves evaporate and are finding themselves in dangerous territory.  Without lines of credit and loan options, there is simply no money, no reserve, and no other division of the business to carry the load to keep the ship afloat.

Through TARP, the Department of Treasury could purchase government loans and be a much needed shot in the arm for the SBA loan program. This would provide the hard cash need by small business owners to weather the current economic climate or at the least buy time to get out before having to declare bankruptcy.