Q: Is there anything in this massive federal economic stimulus plan for small business? — Rick
First a little history: While FDR's New Deal helped soften the worst blows of the Great Depression, the fact is that the Depression did not end until World War II began, due to the massive amount of spending and building that the country undertook to wage and win the war. That spending kick started the economy and finally ended the last vestiges of the long economic downturn.
That is the idea behind the current American Recovery and Reinvestment Plan, although obviously on a smaller scale. The plan is that, as different businesses get government contracts, they will begin to spend that money, and that in turn will create what is known as a "multiplier effect." As these companies get more money, they will in turn buy more from suppliers, and will also increase spending in other ways, including hiring employees to do the work, and so on.
(Note: I am making no judgment call here as to the political and economic debate over whether spending or tax cuts are better. I am simply analyzing the opportunity here as is.)
Whatever the final number turns out to be — a trillion dollars or so — the fact is, there is going to be a lot of federal, state and local money available, and it behooves the smart small business owner to get him or herself ready to take advantage of it. That means learning about government contracting, and getting whatever paperwork and certificates you need in order now, so that when the spigot opens, you are ready to bid on your share.
It's not just the Haliburtons of the world who will be getting these contracts.
And, by the same token, don't think it's just construction businesses who will be able to take advantage of this unique opportunity; many small businesses can get their share; just look below.
But as long as we are on the subject, let's begin with construction. Small business related to the construction industry will be able to bid and get contracts for projects that are "shovel-ready." Here is a sample of some of the projects and the money that will eventually be involved (give or take a few billion):
• $16 billion for construction and renovation of schools• $2.4 billion for "family friendly" military construction projects — family housing, childcare facilities, etc. • $500 million to secure dams, bridges, and tunnels• $4.6 billion for water and hydro power projects
But, like I said, it's not just construction businesses that can partake at the government trough; consider:—
• $9 billion to increase access to broadband, especially in rural communities• $ 5 billion to computerize health records
• $8.4 billion for investments in public transportation• $160 million for investments in maritime transportation• $160 million for investments in maritime transportation• $160 million for investments in maritime transportation• $160 million for investments in maritime transportation• $1.3 billion for investments in air transportation• $1.1 billion for investments in rail transportation• $160 million for investments in maritime transportation• $830 million for repair and restoration of roads on park, forest, tribal, and other public lands
• $2 billion for redevelopment of foreclosed homes • $2 billion for affordable housing
• $6.4 billion for environmental cleanup• $6 billion for sewer, and drinking water systems • $40 billion to for development of clean, efficient, "American" energy• $6 billion for repair of federal buildings using green technology• $613 million for energy efficiency upgrades and construction of alternative energy projects, including wind and solar
So, yes, there is plenty in there for us too.
Today's tip: And finally, I am happy to note that there is also almost $1 billion in loans "to stimulate lending to small businesses." Yes!
Ask an Expert appears Mondays. You can e-mail Steve Strauss at: email@example.com.And you can click here to see previous columns. Steven D. Strauss is a lawyer, author and speaker who specializes in small business and entrepreneurship. His latest book is The Small Business Bible. You can sign up for his free newsletter, "Small Business Success Secrets!" at his website —www.mrallbiz.com.