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.

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.

Bring back the SBA loan.

•Do something real about health care costs. We don't care who does it or what they do, all small businesses really want is that someone do something to rein-in these out of control health care costs.

We all know that employees are our greatest asset. We also know that employees work for a variety of reasons and not just a paycheck. High among those other reasons are health care benefits. Offering this perk helps attract and keep great employees.

But increasingly, offering that benefit is getting tougher and tougher. 'Making health insurance affordable' should not just be a convenient campaign promise, it should be a legislative priority.

•Bankruptcy reform. I'll admit my bias up front: I spent many years as a bankruptcy attorney, helping not a few small businesses either keep their doors open, or shutter them, as the case warranted.

But whatever the situation, I never ran across a single client, in over 10 years of practice, who was anything but earnest and honest. Most people want to repay their debts and turn to bankruptcy only as a last resort. Yet when Congress toughened the bankruptcy laws in 2005, one main reason given was that there was too much "fraud" in the system. I didn't buy it then and I don't now.

There needs to be some changes in the bankruptcy laws, making it easier for small business people to file, and rearrange their legitimate debts, just as there is for larger companies.

Let's give small businesses some relief as well.

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Ask an Expert appears Mondays. You can e-mail Steve Strauss at: sstrauss@mrallbiz.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.