As a small businessperson, I am appreciative of President Obama's announcement of our "bailout" however I'm not terribly optimistic for what it will do for me.
The
focus is on increasing lending and unsticking the frozen credit
markets. There is evidence of thawing as some large businesses have
informed the government that they will not need loans because they've
been able, finally, to secure them in the commercial market. And there
are many small businesses who will be helped by credit availability
like those who buy equipment, parts, "ingredients" (e.g. seeds for
farmers) and have to have cash upfront with revenues coming much later
when the product is finished and sold.
For many of us though
what we need is customers not debt. Loans to clothing manufacturers or coffeehouse owners so they can buy fabric and beans will do them no good if they cannot sell clothes and lattes because consumers have no jobs and no money with which to purchase
what are now luxury items in this economy. And debt, as far as I can see, is useless for those
of us in service businesses, like me. The only way the SBA loans and
tax breaks will benefit me is if the businesses of potential clients grow and
they can purchase the marketing services I sell.
What
is really going to put entrepreneurs like me out of business is the
cost of health insurance. I started my business at the beginning of
2005. It grew steadily until the recession hit full force last year in 2008. From
the end of 2007 (my best year though not yet sufficiently profitable and steady enough to create jobs and hire employees as I'd like to be
able to do) to the start of 2009 my revenues declined and my health
insurance premiums increased. My premiums went up an anstronomical 62% in one year which translates to thousands of dollars annually. I have to increase
my revenue by large double digits just in order to get back to 2007
levels so taking on and servicing additional debt does not seem like
the smartest approach at this time. Read this awesome guest post by
Karoli Kuns at Francine Hardaway's Huffington Post blog for more about
how devastating health care costs are to small and large businesses and the economy in general.
Thus I am in the same boat as many American whether they are small business
owners, employees, or among the rapidly growing ranks of the unemployed
(and, oh by the way, my state, California, has one of the highest
unemployment rates in the country - several of my family members
included) - waiting for health care reform and for a tide to lift us all up.
Related Reading:
Melissa at MOMocrats: Is Health Care Reform Possible?
Massachusetts' struggle with cost containment to sustain their universal health care coverage program:
“Frankly, it’s very hard for the average consumer, or frankly the
average governor, to understand how some of these companies can have
the margins they do and the annual increases in premiums that they do,”
Mr. Patrick said in an interview. “At some level, you’ve just got to
say, ‘Look, that’s just not acceptable, and more to the point, it’s not
sustainable.’ ”
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