Picture a number of your favorite small , independent businesses. Maybe you love stopping by Equator Coffee or Boba Guys on the way into work, shopping at Benny Gold or Heath Ceramics, working out in the Dailey Method, or sitting down at Brown Sugar Kitchen and hoping a few Warriors grab the table alongside you. Now what basically told you that with no small handful of government programs, many of your favorite places may not exist?
The so-called “Skinny Budget” cuts funding for several successful bi-partisan small business programs that helped launch and grow tens of thousands of small businesses across the San francisco bay area – and thousands and thousands across America. It cuts $42 million from Sba programs targeted at job creation; $32 million from programs that help people of color start companies and hire more employees; and completely eliminates the city Development Financial Institution (CDFI) program that funds community banks, nonprofits, and lending institutions who lend to the 70% of smaller businesses that banks ignore.
That's $284 million – under the price of two F-35 fighter jets – and a drop in the bucket when you consider these programs turn that funding into over a billion dollars of local economic activity, tens of thousands of new smaller businesses, and thousands and thousands of new jobs for working people. Without these programs, a lot of the great local business owners which make our communities what they're wouldn't have gotten off the floor.
Why is that? Let's take small business lending, for instance.
For generations, most small businesses got their funding from community banks or lending institutions. Beginning with the 80's era of deregulation, big banks started buying up a lot of the smaller banks round the country. Over time, those big banks drastically reduce loans to America's 28 million small businesses. It ought to are available as no surprise that smaller businesses of people of color, native people, women, and immigrants – that have always had a difficult time getting loans in the big banks – saw their funding sources dry out even faster.
The Association for Enterprise Opportunity notes that 8,000 small company applications are declined watch day. Within California, the fastest growing segments of job-creating small businesses are African-American ladies and Latino women – and the Sba says they're three-times as apt to be rejected for loans by a bank.
Close to 40% of us Californians work at a small business – and here in the San francisco bay area we've over 200,000 of them. Our small businesses already are under a lot of pressure from sky-rocketing rents combined with much-needed increases in minimum wages and benefits. If small businesses will also be squeezed from the resources they have to keep their companies competitive and growing, we could see more companies close for no other reason than they couldn't get small quantities of affordable capital.
The cuts to small business programs will hurt America's job creators in several ways, and small business lending is simply one example. Now's not the time to consider away much more resources from America's job creators.
Small companies are the character of our communities. The bakery that makes your preferred alfajores, the shop that sells those one-of-a-kind-shirts and hats you love, the hardware store that walks you through painting an area or repairing your showerhead. That list continues. Smaller businesses help make your neighborhood, town, or city unique. Smaller businesses employ 120,000,000 Americans (that's one out of every two jobs!) You should be empowering small business owners to improve their competitiveness while at the same time creating quality jobs with better wages and easier access to benefits. Then every community and worker within the San francisco bay area benefits.
What can you do? Contact your Representative and Senators and inform them you would like them to aid smaller businesses and the programs that keep them strong. And support small and local business owners with your dollars!
