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Should the US government do more to help people become small business owners?

Should the US government do more to help people become small business owners?

  • Yes

    Votes: 8 44.4%
  • No

    Votes: 10 55.6%

  • Total voters
    18
See Solydra. ;)

Solyndra was not a small business in my view. A company that has over one hundred million dollars in annual revenue is not a small business.

But that aside, one problem that Solyndra had was manufacturers in China started saturating the market with relatively cheap panels. I really think that the government can play a role in leveling the playing field through tariffs and taxes in that case.
 
It isn't hard for them. They will give loans to credit worthy borrowers.
'

So what did you mean exactly when you said that a small business loan was one of the hardest for a financial institution to make? I would be interested to know exactly what makes it so hard, of that is indeed the case.
 
The government should not be in the lending business.

In an ideal world they should not be. But obviously we are not in an ideal world and the government does indeed engage in guaranteeing and making loans to businesses. And I'm saying that since that is the case, they should do more to make it easier for people who are trying to start a small business to get financing. If the banks won't do it, the government should step up to the plate.
 
Reducing federal expenditures and taxes does not necessarily translate into money being made available to private businesses. The banks have to be willing to lend.



Loaning money too small businesses is not necessarily taking money from some to help others. If the money is paid back with interest, that is not the case.

Credit risk analysis requires expertise and having skin in the game. The failure rate for small businesses is my concern, as well as nonsense like "minority owned" or "enterprise zones" being a consideration when choosing who "deserves" our (the taxpayers) special help. I have serious doubts that a DC bureaucrat knows more about any local small business operation's chances of success than current area banks/credit unions do.

Startup Business Failure Rate By Industry | Statistic Brain

Why Small Businesses Fail: Top 7 Reasons Startups Fail and How to Avoid Failure
 
Solyndra was not a small business in my view. A company that has over one hundred million dollars in annual revenue is not a small business.

But that aside, one problem that Solyndra had was manufacturers in China started saturating the market with relatively cheap panels. I really think that the government can play a role in leveling the playing field through tariffs and taxes in that case.

You attribute the failure of Solyndra to gov't actions (tax policy) while wishing the gov't to invest "wisely". Much of that Solyndra revenue was due to gov't provided incentives (tax policy) that made no mention of the country of origin to qualify for those credits. Once we start allowing the gov't to give tax preference to its own business investments then we are firmly into crony capitalism.
 
The U.S. government stay out of the f*cking economy...completely.
 
'

So what did you mean exactly when you said that a small business loan was one of the hardest for a financial institution to make? I would be interested to know exactly what makes it so hard, of that is indeed the case.

Because the SBA has to approve the loan and accept the loan. The paperwork is a nightmare. The process is a nightmare. The effort is burdensome.
 
Should the US government do more to help people become small business owners?

yes. by preventing more supermergers and by breaking up more anticompetitive monoliths.
 
In an ideal world they should not be. But obviously we are not in an ideal world and the government does indeed engage in guaranteeing and making loans to businesses. And I'm saying that since that is the case, they should do more to make it easier for people who are trying to start a small business to get financing. If the banks won't do it, the government should step up to the plate.

We need banks and lenders to be in the lending business. NOT the government. Taxpayer money shouldn't be loaned, the government has no clue about lending (obvious from their regulatory "efforts"), and the risk is far too big.
 
Credit risk analysis requires expertise and having skin in the game. The failure rate for small businesses is my concern, as well as nonsense like "minority owned" or "enterprise zones" being a consideration when choosing who "deserves" our (the taxpayers) special help. I have serious doubts that a DC bureaucrat knows more about any local small business operation's chances of success than current area banks/credit unions do.

Startup Business Failure Rate By Industry | Statistic Brain

Why Small Businesses Fail: Top 7 Reasons Startups Fail and How to Avoid Failure

I agree, the failure rate for small businesses is a concern. That's one reason why I was thinking that with my inventory loan idea, it should start small and grow as the business becomes more credible and demonstrates an ability to repay. As far as the DC bureaucrat goes, the government can hire people with business experience and who are familiar with local conditions to help make assessments. Sure, it may be difficult, but I think it's possible to do in a reasonable manner if thought out properly.
 
You attribute the failure of Solyndra to gov't actions (tax policy) while wishing the gov't to invest "wisely".

No I did not, I attributed it to having to compete with Chinese manufacturers who typically can produce items at a lower cost and can therefore sell them at a lower cost. What I did say is that the government can do various things to make up for the various disadvantages that US companies face in that respect. That is different than attributing the failure directly to government policy.

Much of that Solyndra revenue was due to gov't provided incentives (tax policy) that made no mention of the country of origin to qualify for those credits.

That's interesting. I did not know that. Do you have a source for that? One thing about Solyndra is that had some sort of cylindrical design for their panels which they claim eliminated the need for the panels to track the sun. It would seem to me that it would be more costly to manufacture such panels as opposed to flat ones, regardless of where they were manufactured. I really don't know if the savings due to increased efficiency, assuming that they were more efficient, justified the cost, or if people really felt that paying more for them was worth the increased cost.

Once we start allowing the gov't to give tax preference to its own business investments then we are firmly into crony capitalism.

That is a very strong point, and you are exactly right, that is something that would surely be abused. That said, perhaps the proper oversight could insure that the risk of abuse would be minimized. I need to think about that more. Good point!
 
Because the SBA has to approve the loan and accept the loan. The paperwork is a nightmare. The process is a nightmare. The effort is burdensome.

That is a shame. It sounds like that is an area that someone should devote some resources to trying to figure out a way to streamline the process. Part of the problem with government bureaucracies is that bureaucrats spend quite a bit of time trying to figure out how to cover their butts, as opposed to the task at hand. I bet a lot of that red tape is a result of that.
 
I agree, the failure rate for small businesses is a concern. That's one reason why I was thinking that with my inventory loan idea, it should start small and grow as the business becomes more credible and demonstrates an ability to repay. As far as the DC bureaucrat goes, the government can hire people with business experience and who are familiar with local conditions to help make assessments. Sure, it may be difficult, but I think it's possible to do in a reasonable manner if thought out properly.

That involves too much power for the gov't to use social justice, social engineering or just plain old pork barrel politics. After all we have "interstate" highways in Hawaii just to be "fair". We tax wages to subsidize out of wedlock childbirth and then express shock at the results of that insane policy Nearly the same thing could be accomplished at the state/local level using tax breaks (like NY is now doing) to encourage business start-ups..
 
'

So what did you mean exactly when you said that a small business loan was one of the hardest for a financial institution to make? I would be interested to know exactly what makes it so hard, of that is indeed the case.


startup loans payback history is atrocious

most small businesses (well over 50% ) never make it to year 2

why the loans are hard for banks/credit unions to make is easy

1. no history of company
2. usually very little planning documentation
3. no pro forma
4. most borrowers have little private equity, so hardly any collateral
5. poor credit history of owner on personal credit

those are all valid reasons NOT to give loans for small business

that is why a lot of people put second mortgages on their house, borrow from friends/family, or try to find investors

my daughter just got her SBA loan granted....

it took 8 months.....and a lot of help from me on getting her to do all the planning docs
 
That is a shame. It sounds like that is an area that someone should devote some resources to trying to figure out a way to streamline the process. Part of the problem with government bureaucracies is that bureaucrats spend quite a bit of time trying to figure out how to cover their butts, as opposed to the task at hand. I bet a lot of that red tape is a result of that.

I could not agree more. It is such a bureaucratic nightmare that in the end, the banks & credit unions just don't do it. When that happens, credit dries up. If they could remove some of the barriers, I would almost guarantee that it will pick up. We need our small businesses to be able to grow and thrive.
 
<snip>

my daughter just got her SBA loan granted....

it took 8 months.....and a lot of help from me on getting her to do all the planning docs

It's a hellish process, isn't it?

Did she end up with an SBA loan or a conventional small business loan?

The requirements imposed on banks/credit unions these days is a nightmare. They have to run spreads, RMA analyses, test and re-test, evaluate collateral, value collateral, and so on. Nightmare. And it's the government that made it this way, not the lenders.
 
Do I want them to help? Yes. I want them to help by reducing taxes and regulations that keep small businesses from being profitable. Leave these people alone and let them make money.
 
Even the most libertarian of economists acknowledge the need for government to regulate away monopolies. The premise of economic growth being best enabled by free and unimpeded trade precludes the existence of monopolies and oligopolies.

There are complex and costly regulatory barriers to entry thanks to government bureaucracy that allow de facto monopolies or oligopolies to enjoy the protections from new potential competitors who will find those barriers to entry difficult to overcome. I think the federal government can certainly help reverse the decline of American entrepreneurship, and that starts with exemptions for small emerging enterprises to some of the complex regulatory hurdles inflicted upon them by government regulators who are working for the big corporate lobbies.
 
It's a hellish process, isn't it?

Did she end up with an SBA loan or a conventional small business loan?

The requirements imposed on banks/credit unions these days is a nightmare. They have to run spreads, RMA analyses, test and re-test, evaluate collateral, value collateral, and so on. Nightmare. And it's the government that made it this way, not the lenders.


Hate to say it, but I really don't know

She got the money deposited directly into her account from the bank in Texas, where she is

I know we submitted all the sba crap.....

But whether it is a conventional business or guaranteed thru sba, I don't know

She was so excited, she didn't really say
 
The biggest problem is that government imposes too many taxes, and too many regulations, which make it too difficult to start or sustain a business.

I keep hearing people say this but I've never seen evidence provided.
What additional taxes and regulations actually apply to small businesses?

Now, if you have employees it becomes more difficult since you need to handle payroll for them and, if they're employees (vs. contractors) you need to pay 7.5% for Social Security and Medicare. But you can just pay the employee 7.5% less, too, since--were they a contractor--they'd have to pay that, themselves, anyway.

Anyway... I'd be interested to see what taxes and regulations apply and what barriers need to be crossed for them to apply. I've been both a contractor and now work for a small business (4 people) and it hasn't seemed that troublesome.
 
One thing that I think conservatives should do, if they really want to promote the notion of self sufficiency, is to create, implement, and promote policies that are designed to help Americans who are attempting to start small businesses. Part of the problem for small business owners, even those that are established, is that credit has become more difficult to obtain. This in turn has the effect of depressing demand because there are less people with money than there would be if credit was more generous. Here's an interesting article:

Why Small Business Lending Isn’t What It Used to Be

I think the party that championed policies that made it easier for people who are starting a business to obtain the financing they need, as well as other assistance such as giving advice about the best suppliers of various products, and demographic analysis, would be a very attractive position for people to buy into.

What do you think? Should the US government do more to help people become successful small business owners?

Yep. It should secure our rights, repeal every single regulation, tax, mandate, restriction, and requirement that does not absolutely have to be there to keep the states and corporations who operate across state lines from doing economic, environmental, or cultural violence to each other, and then leave the people strictly alone to live their lives. Oh and it should balance the budget, begin paying down the national debt, and it should do that by stopping all unnecessary spending and not by raising taxes. Do that and it would be the biggest boost to entrepreneurship this nation has ever seen.
 
Beat me to it. The government already offers a lot of help. What thwarts people more than anything else is over-regulation, making it harder to be and stay profitable. We need to dial back local, state, and federal regulations to a core necessity and leave people alone to spend time actually running their businesses.

Which regulations, specifically?
 
i will give you a small example of government out of control

i am in the retail automotive business

we are regulated by so many agencies i have lost count

regulations on what stickers must be affixed to every car on the lot....regulations as to what our advertising can and cant say.....regulations on our trucks that take vehicles to and from auctions....regulations on all the solvents, oils, gasoline, and other assorted dangerous materials we handle....regulations on the safety on how our employees must be dressed, and what protective gear they must use.....regulations on how our finance managers can submit loans for our customers to banks.....regulations involving cash transactions....regulations involving obtaining credit histories.....regulations involving all the tag and title work for all the vehicles we sell.....and the list goes on, and on, and on......

is government needed? sure

have we taken it to the nth degree? oh yeah

i pay a lot of money in wages every year to make sure all the stuff stays right, and legal

my wife with her food business has more in some areas, and less in others.....but needing 2-3 people just to deal with the governmental bull**** becomes a bit much at times
 
The biggest problem is that government imposes too many taxes, and too many regulations, which make it too difficult to start or sustain a business.

The very last thing any would-be business owners need is more “help” from the government. Government needs to get out of the way, and stop stifling existing businesses, as well as efforts to start new businesses.

The way for government to “do more” to help business is for it to do less.

Absolutely!!
 
i will give you a small example of government out of control

i am in the retail automotive business

we are regulated by so many agencies i have lost count

regulations on what stickers must be affixed to every car on the lot....regulations as to what our advertising can and cant say.....regulations on our trucks that take vehicles to and from auctions....regulations on all the solvents, oils, gasoline, and other assorted dangerous materials we handle....regulations on the safety on how our employees must be dressed, and what protective gear they must use.....regulations on how our finance managers can submit loans for our customers to banks.....regulations involving cash transactions....regulations involving obtaining credit histories.....regulations involving all the tag and title work for all the vehicles we sell.....and the list goes on, and on, and on......

is government needed? sure

have we taken it to the nth degree? oh yeah

i pay a lot of money in wages every year to make sure all the stuff stays right, and legal

my wife with her food business has more in some areas, and less in others.....but needing 2-3 people just to deal with the governmental bull**** becomes a bit much at times

All of that regulation and compliance comes at a huge, huge cost - of course you know that, but the average Amerikan couldn't care less; or worse, they cheer it on b/c '... the government is there to protect us FROM the big, bad corporations.

Capitalists?? small business owners?? corporations?? they are all the enemy of the people.

As bad as things are now, they are only going to get worse - once a majority of citizens in a society succumb to the poisonous thinking of collectivism and authoritarian rule, that society cannot be saved - short of violent revolution; but of course Amerikans have been dumbed down and rendered meek and defenseless against the government that controls and abuses them.

I'm in my 50's, and have been aware that our country was being deliberately made into an authoritarian state since I was in my 20's. The only question in my mind back then was, '... will the process be complete in my lifetime'. 30 years after I became aware of what was happening, the answer to that question I asked myself all those years ago is, yes. The process of imposing authoritarian rule is almost complete.
 
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