Small-Biz Owner Takes His Case To The Top

Last week, one entrepreneur had the opportunity to ask President Obama a question that no doubt has been on the mind of many others.

The venue was a town hall meeting in Tampa, Fla., on Thursday, the day after the president’s State of the Union address, reports The New York Times.

Thank you. My name is Steve Gordon. I’m from Clearwater. And I own a small company, environmental company. I manufacture the Instant-Off water-saving device that fits on any faucet worldwide. I’m frustrated because I can create 500 jobs. I’ve gone to the banks; I can’t get a loan. And I speak for all businesses in the United States. [Applause.] We are tired of dealing with banks. And I don’t understand – I know you care; I know you’re trying. And I appreciate the pledge of $30 billion to small businesses. But lending it to the banks to lend to us is not the answer. It’s just not.

What I suggest, and the question is, why can’t you use the S.B.A. just like you lent directly to Wall Street, you lent directly to the automakers, you lent directly to the banks? Why can’t the government make small-business [loans] available directly to us? [Applause.]

President Obama: Well, this is a good question. First of all, you should be aware that we have increased S.B.A. loans during the course of this year by 70 percent in some cases. So some of the key programs for businesses like yours we have massively increased their lending. And by the way, we’ve waived some of the fees and red tape that are associated with you getting a loan from the S.B.A..

Now, it’s not enough. I know you’re shaking your head here. I understand it’s not enough because you still want a loan. I just want you to know, it’s not like we haven’t thought of why don’t we use the S.B.A. We have. The challenge that we’ve got is that even S.B.A. loans are generally run not by the S.B.A.; the S.B.A. essentially works with local banks, community banks, neighborhood banks, to process the loan. And essentially the S.B.A. underwrites the loan.

And so the S.B.A. does not have the infrastructure to go all across the country in every region and process loans to small businesses directly because they don’t have enough people – somebody yelled, “Why not?” The S.B.A. doesn’t have the staff to do it.

Keep in mind, a small business loan of any sort, or a large business loan of any sort, requires some sense of, what’s the business plan? What are your projected earnings, et cetera, et cetera? Somebody has got to do that. Now, if the S.B.A. were to suddenly take over that entire function, we’d have to stand up a massive bureaucracy – a huge one. And we’d have to train all those people, and it would take too long, and you’d be frustrated – why is it that this big government agency can’t seem to run anything?

So what we’ve decided to do instead is to take $30 billion that was repaid by the banks and make that available under criteria that will encourage small banks to give those loans to you. And if we do that effectively, we can potentially get that money out the door more quickly.

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Photo by Tampa Tribune.

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