There's hope for some struggling small business owners - WALB.com, Albany News, Weather, Sports

There's hope for some struggling small business owners

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By Len Kiese - bio | email

ALBANY, GA (WALB) - Help is on the way to struggling small businesses. As part of a $15-billion plan President Obama outlined Monday, The Small Business Administration would get $730-million to increase loans and reduce fees for entrepreneurs.

Many people don't realize the impact that small businesses make on the area. They provide 70 percent of the jobs in America today.  Ownership is a dream for many and in this economy, many of those dreams need a financial boost.

For David Jackson, there was always something about fashion. "I just like to see other people look good," said Jackson. So he hoped to use that good eye for clothing to cash in by opening his own store in 2007. "June the 9th to be exact," said Jackson.

He opened Top Notch Fashion in Albany but the fashion biz hasn't always been exactly high. "It's been kind of up and down. I've had a lot of hard times," said Jackson.

It's a common story of the trials of growing a business.  Many call it the American dream. Jackson calls that dream a blessing.

"Sometimes I sit back and think I can be doing other things, working for this person or that person, and I kind of smile when I know that I'm working for myself," said Jackson.

These days the economy isn't working as well as it used to for entrepreneurs like Jackson. Banks have been more strict with money. Take the state of Georgia for example.  In 2007, the the Small Business Administration funded 3,400 loans in the Peach State with a guaranteed amount of $1 billion.

"In 2008, that dropped down to 2,200 loans for about 6 or $700 million," said SBA Lead Lender Development Specialist George Hoag. Things could now change with the Obama administration's 2009 Recovery Act.

"The President is going to initiate $15 billion to free up the investment pool, the secondary market. This should get everything moving," said Hoag. Along with a secondary market investment, loan guarantee levels will rise to as much as 90 percent and certain loan fees will be temporarily wiped away.

"It's going to waive the 2 percent fee on getting an SBA loan. If you're talking about a $2 million loan, that's quite a bit of money, $40 or $50,000," said Hoag.

SBA officials are excited about the news.  They shared it with several business owners at a workshop in downtown Albany, including Jackson who was all ears. "I'm hoping to expand in the future and really try to do some other things as well," said Jackson.

He finds it encouraging that the government recognizes the needs of business owners. "That's a blessing," said Jackson, "really to me it's a blessing to have my own business.

For him, the help is a perfect fit.

George Hoag says that a great percentage of small businesses fail within the first 18 months because they don't have the working capital to tide them over. This plan may help change that fate for some of them.

Under the plan, some small business owners can also get tax breaks. The IRS has been ordered to allow qualified people to write off up to $250,000 in investments this year and claim losses for the past five years in the current tax year.

 

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