Ask an Expert: It may be time for a 'small business bailout'

— -- Q: Was there anything in the bailout for small business? — Terry

A: Sure, there were a few things in the bloated $850 billion bailout bill that would help small businesses, how could there not be? Raising the Federal Deposit Insurance Corp. (FDIC) limit to $250,000 helps, as does the tax break given to community banks.

But overall, the answer is no – the bailout was not meant to help small business.

So once again in this election season, we see that, despite the fact that small business makes up 99% of all business in this country and creates 60% of all new jobs, we are more akin to a forgotten child of a divorce than a beloved member of the family: Every four years the candidates come by, tell us how important we are and how much they love us, but then they drive away, not to be heard from again for, say, four years or so.

If Congress and the new president, whoever it turns out to be, really wanted to help small business, they would pass a 'small business bailout.' Here is what it might include:

•Restore the Small Business Administration. The SBA does many things that help small businesses, everything from guaranteeing loans (thereby making them easier to get) to education and disaster relief.

And despite all of the rhetoric about how important small business is to the economy, the fact is that since 2000, the SBA budget has shrunk by a third – from $866 million down to $572 million.

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The big loser in those cut backs? Your small business. SBA loans are down anywhere from 10% to 30% or more – from last year alone – depending on the loan program.

And there couldn't be a worse time for that to happen, coming as it does, during the worst credit crunch in our lifetimes.

Sure, the massive bailout is intended to ease some of this credit crunch, and hopefully it will, but SBA loan guarantees are different. They allow banks to take a risk, not only on a great, if untried, new small business, but equally on those tried and true small businesses that need a partner.