Need Capital for Your Business?

We continue to see the most significant challenge facing small technology firms is the shortage of capital.  Congress has known about this issue for the last few years, however, there has been no substantial move to address the need.  And while the Recovery Act provided much needed funding for many businesses and government jurisdictions, small businesses were left without cover.  Of course, some noted that small businesses could apply for SBA loans, however, the banks were simply not lending.  So, even SBA-backed loans have been difficult to obtain over the last few years.

We recently noted the trickle of funds being distributed to community banks under the Small Business Lending Fund legislation that was enacted last September.  However, the amount of funds that have been distributed so far is negligible.  Further, banks receiving these funds are under no mandate to actually make small business loans.  Certainly there are incentives to do so, but in order to benefit, the receiving banks only need show minimal increases in small business lending in the two-year period following receipt of the funds.

So, what to do?  CompTIA is working to promote a new look at the Small Business Lending Fund.  While $30 billion was authorized, Treasury has applications for less than $12 billion.  Accordingly, we are working to develop support for allocating these unused funds to a direct lending program.  Small tech companies are in need, and Congress needs to act.

So while there is no immediate answer, the SBA has developed a practical tool to assist small businesses in identifying possible sources of business loans, grants and financing.  This tool allows small businesses to click through questions to narrow down the available funding sources.  For example, a technology firm seeking funds to expand its business or obtain working capital in Illinois would find six funding programs from the SBA and six from the State of Illinois.  Certainly, this does not answer the problem of restricted credit for small businesses, but it does provide information on funding programs that might not be common knowledge.