Stimulus Bill Offers Help for Struggling Small Businesses
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New lending and guarantee programs through the U.S. Small Business Administration will be rolled out over the coming weeks to help struggling employers and startups survive the economic crisis paralyzing the nation.
But the funding is being doled out on a first-come, first-served basis and the small businesses that make up the bulk of the 1,100 member Berkshire Chamber of Commerce are being encouraged to find out now what they can access.
"That business stabilization loan program is only $255 million and once it's gone, it's gone," Keith Girouard of the Massachusetts Small Business Development Center told some two dozen chamber members on Thursday.
The stabilization loans — with 100 percent guarantees — a is only of one several "dramatic and significant" changes being made through the stimulus bill to aid small businesses through the economic downturn, said SBA acting Regional Administrator Robert H. Nelson. "I think it's going to go a long way in preserving jobs."
The credit-crunch relief is coming none too soon.
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| Stimulus Bill Help | |
| $375 million | Loan fee reductions; guarantees up to 90 percent |
| $255 million | New stabilization loans; 100 percent guarantees |
| $30 million | Microloan program for new lending and lender assistance |
| $20 million | Technology to streamline oversight and processing |
| $15 million | Surety Bond Program expansion |
| $25 million | Staffing to meet demands for new programs |
| $10 million | Office of Inspector General |
| Troubles? Call the economic hotline: 1-617-565-5627 |
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Joining Nelson and Girouard were SCORE business counselor Phil Wiener and SBA Springfield branch manager P. Edgardo Tarrats. Businesses were also reminded that they could get confidential counseling and help in developing business plans, through SCORE (Senior Corps of Retired Executives) and the center.
While the stabilization program is designed to help small businesses meet existing debt, another $375 million will be used to reduce or eliminate loan fees and guarantee loans up to 90 percent, which should help startups as much as existing employers.
Nelson said there has been a "dramatic fall off" over the last five months of startups using SBA loans from 35 percent to 20 percent. "It's tough out there."
The loan changes should also help companies prepare for contracts for the billion or more of the $787 billion American Recovery and Reinvestment Act headed to Massachusetts for infrastructure and other spending.
A bright spot for the area, said Nelson, is the strong local banking sector intent on providing credit service to local business.
Chamber President Michael Supranowicz said the Berkshires is feeling the pain from the financial crisis but may be better positioned to survive through the next six months or so until the economy begins to turn.
"We're kind of an island; over time we've found a way to service ourselves very well," he said. "We built a little economy inside Berkshire County ... it takes a lot longer for [a downturn] to affect us and it never affects us as bad as the rest of the country, but it does take us a little longer to get out of it."
Rosalie Berger, president of RTR Technologies of Stockbridge, has been through tough economic times once before. In the years after the Sept. 11 terrorist attack, the company, which makes heating and de-icing elements for railways, was facing calamity.
"I just want to say that my company wouldn't be here if not for the SBA," she told her fellow business owners. "It was extraordinary what was done for us and done instantly."
Warning: Don't believe letters falsely claiming to be from the SBA and asking for bank account information supposedly to ensure the employer gets a federal tax rebate. If you receive such a letter, report it to the Office of the Inspector General at 1-800-767-0385 or OIGHotline@sba.gov.
