The federal government decided to give small businesses a leg up. It is simply a token gesture and its likely to protect only a very small number of companies from the economic downturn.
A representative from the Small Business Administration said "Effective Aug. 1, the new standard allows small businesses with a net worth of $8.5 million or less and a net income of $3 million or less to qualify for the program."
The current guidelines are a tangible net worth of $7.5 million or less and a net income of $2.5 million or less.
In other words, from a practical standpoint, corporations outside the very smallest companies will not have access to loans made available by the SBA. The agency indicated that "the SBA is conducting a comprehensive review of all of its small business size standards over a two-year period."
By the time the SBA acts on expanding the pool of companies to which it will lend it may be very late in the current economic downturn. It is a clear indication that the government is not willing to grant any "emergency" measures to help smaller businesses along the lines of the aid it gave to consumers through tax rebates.
It is a bit like fiddling while Rome burns
Douglas A. McIntyre
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