By J. Mac Holladay, Founder and CEO. 

This recession has had a devastating effect on small businesses across the country. In fact, 41% of all the jobs lost in this recession have come from firms with fewer than 50 employers. That is FIVE TIMES the small business job losses than the 2001 recession.

Two important things have happened recently that make this the right time to focus programs on starting and assisting small firms.

First, two weeks ago the Small Business Administrators broadened and strengthened its 7(a) and 504 loan programs. The federal guarantee was raised from 80% to 90% reducing the loan bank risk and waived the borrowing fees. Additionally, the loan amount available was raised an additional $125 million through the America Recovery And Reinvestment Act.

On February 2nd President Obama took another important step. He is asking Congress to move $30 Billion from the TARP program to local community banks. Many of them have been “frozen” by commercial real estate failures and new asset requirements. This should make much needed money available to small businesses now. Banks with less than $10 billion in assets will be able to borrow from the Treasury at a dividend rate of 1% for new small business loans.

The Wall Street Journal reported today: “SBA-Backed Loans are Bright Spot in Gloomy Climate.” If you are not already working on it, be sure your banks understand the 7(a) and 504 5BA programs. You can help save jobs and create new ones.

Every chamber and economic development program needs to focus on small business job creation. Each of the last three recessions has been ended by small business growth. This one can as well. Let’s get to work!