Yesterday we shared an article about why commercial lending is still so hard to come by, but in this week’s issue we also looked at two lending programs that other communities are using to get small businesses the crucial micro-loans they need to start and maintain their businesses.
Keep in mind, when I say small business I’m referring to the types of businesses that most of us picture when we hear that phrase – the three-man painting company, the tavern with 15 employees, or the small hardware store on the corner. These are the businesses that define our communities and develop ground-breaking innovations.
The definition of small business used by our Congressmen and banks is much different. Check out the Small Business Administration’s general guidelines for what qualifies as a “small business.” By the SBA’s definition, in Door County only Bay Shipbuilding Company, when at full strength, does not qualify as a “small business.”
“What we’re really talking about in Door County and rural communities,” said Baylake Bank CEO Robert Cera, “is micro-business.”
Wendy Baumann, director of the Milwaukee-based Wisconsin Women’s Business Initiative Corporation, also spoke to the shifting definition of the term.
“The government talks about helping small business owners,” she told me, “but everybody has a different definition of what that is.”
Citibank launched a high-profile small business lending initiative, the Next Street Opportunity Fund, to much buzz. What businesses qualify? Those with $3 million to $60 million in annual revenue. Almost all of my business owner friends would love for their businesses to be that “small.”
Multifunding.com ranks banks on loans to small businesses, but all loans of $1 million or less qualify. While every business owner would love to come across $1 million in capital financing, most will tell you that they need only a fraction of that to expand, build, or improve their business.
Unfortunately, true small businesses don’t have much of a voice in Madison and Washington – their owners are too busy waiting tables, hunting for customers, serving on community associations, and otherwise toiling to keep the economy afloat. So the power of our representatives and financial institutions continues to gather behind big business, those with the sway to ask for tax breaks and incentives.
Meanwhile, small business owners toil and wait for the trickle-down.
Read more about micro-financing for small business>>