I’ve slipped on my thick plastic glasses with the tape on the nosepiece because it’s Geek Time. With the possible exception of insurance policies and nuns—wait, scratch nuns—nothing is less sexy than the Small Business Administration and its loans process. Tax forms read like porn in comparison.
Yet the White House is expected to make an announcement today about the SBA that’s of crucial importance to restaurants, and that needs to be noted. Press reports that hit in a flurry yesterday say President Obama will channel some $375 million from the stimulus spending kitty into the SBA’s loan program, a pipeline regularly used by restaurant franchisees. Indeed, the restaurant business is reportedly the most frequent user of SBA loans, which are channeled to small enterprises through designated local banks.
In the world of grassroots restaurant financing, this is hot. Angelina Jolie hot.
Lending to small businesses would also be helped by the infusion of $10 billion in stimulus funds into the secondary credit market. The planned injection is intended to encourage the flow of capital to small businesses by increasing lenders’ confidence they can sell the loans on the so-called secondary market, thereby turning that deal into cash they can then use to make another loan.
Unfreezing capital for restaurant expansion or renovation would be a tremendous boon to the industry. Obama appears to have a blowtorch in one hand, the match in the other.