Small Business Loans: The Conundrum

Today it appears that a new $30 billion loan program will be signed in to law. Yet, as one article points out, it may not do much to unclog the engine of economic growth that is small business.

Why? Because most small businesses aren't expanding in uncertain economic—and regulatory—times.

"Our business customers are mired in uncertainty and are reluctant to invest in their businesses," said William Chase, who is CEO of a Memphis community bank, Triumph Bank, adding that he's got enough money to cover the very limited number of loans that are being requested these days.

What about the loan program? Apparently Triumph isn't buying into it.

"We have taken a strategic decision not to have our primary regulator, the government, also be a partner in our bank," Chase said.

Food for thought.

How about a few investment tax credits instead? While I've been wary of SBA loans (express or otherwise) and don't recommend them to struggling companies due to the strings attached, I often recommend taking advantage of tax credits tied to investment. 

Investment tax credits seem a less underhanded way of wealth re-distribution (or an easy way to free the flow of capital, depending on your perspective).

Fenley's Glass

Don Fenley, who heads up the Kingsport Times-News electronic edition, does a good job of comparing the numbers for the national recession versus Kingsport's version. 

Fenley uses numbers to show that Kingsport's faring better than most places, but he also points out that the perception locally is one of fretfulness.

Fenley worked at a variety of newspapers, primarily in the Southwest (including Huntington Beach, CA) and the Pacific Northwest, before joining as editorial page editor at the Times-News in 1993. As such, he has a good perspective on how things work in areas beyond the Northeast Tennessee region.

While he doesn't come right out and say "we're doing better than most" in his blog post, it's implied, and I tend to agree. For all those who think the local economy is bad, it's nothing compared to many other parts of the country. From Las Vegas to Huntington Beach, from Richmond to Asheville, the economic downturn is considerably worse than it is here.

In addition, since we tend to trail the national averages in many aspects, it's been a blessing to see a resilient economy in the local region mostly buffered against the large waves of layoffs, severe housing drops and genuine despair.

We may fret in Kingsport, but we've not yet come close to despair. Yes, housing prices have declined, but the housing market's still active; so is the commercial new construction market in the region. And so are entrepreneurial opportunities for those who consider timing right to start something new.

An entrepreneurial lord? Or just a sane business succession strategist?

"One of the greatest compliments you can be paid is that the organisation is big enough, good enough, and strong enough to withstand you going and embrace somebody else that will add value to your baby and not hurt it," stated Lord Digby Jones, former director general of the Confederation of British Industry, in a recent Financial Times interview. “What’s the point if it dies with you? It might do your ego a power of good if the world can’t go round without you but, I have to say, what was the point? What sort of legacy is that?”

 

Well played. Read the rest of the article, discussing the merits of succession planning on levels both great and small, at Yahoo! Finance or the Financial Times.

TechStar celebration - free to guests of NETTC members

In years past, the NETTC TechStar Awards event has been a luncheon that was, well, a bit pricey for those who didn't have corporate sponsorship - or skin in the game in terms of an entry in one of the TechStar categories.

This year, the price of admission can't be an excuse, not at least for the Northeast Tennessee Technology (NETTC) members or a limited number of guests of NETTC members. As of today, the EventBrite sign-up still shows 95 guest tickets available.

For free.

I've already recommended the event to an NETTC member, who in turn invited me to go as a guest. So I guess that means there are 94 free tickets left . . . 

In addition, back by popular demand, the TechStar awards will be also be accompanied by a tech symposium. It's the kind of event where short classes are held on a variety of topics. If I were a member, it's the kind of place I'd do one of my presentations on business streaming to the iPad / iPhone or how to convert old videos to BluRay, but the other presentations look equally as interesting ;)  

The tech symposium runs for a few hours prior to the TechStar dinner.