Counseling Is Often More Valuable Than a Small-Business Loan – WSJ
The microloan program got its start in the late 1990s with $200,000 in seed money from local banks, the Dothan Area Chamber of Commerce and the Wiregrass Foundation, said Matt Parker, president of the chamber. At the time, Solomon said, businesses in the city werent eligible for U.S. Department of Agriculture microloans. Dothan was too large of a city to qualify for the program, and banks werent interested in loaning the small amounts needed by small businesses, he said. The task force that created the microloan program included Solomon, Parker, Mike Schmitz, Mark Culver and Pat Thomas, Parker said.
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Small Business Administration, Maria Contreras-Sweet, made a bold statement this week in an interview regarding the state of small-business lending and the SBA’s role in aiding small businesses. Ms. Contreras-Sweet said “the counseling is almost more important than the lending.” About the Author Ami Kassar founded MultiFunding LLC , based near Philadelphia, which helps small businesses around the country find sources of financing. (MultiFunding at times accepts fees from lenders that agree to make loans.) What she is referring to is something I encounter on a regular basis as well. Small-business owners often believe that loans are a remedy for nearly all business problems. However, a loan isn’t always the best answer. In fact, it can oftentimes worsen the problems small-business owners are facing by putting them even deeper into debt when that may be unnecessary. piggy bank with band-aids CREDIT: iStock piggy bank with band-aids CREDIT: iStock By acknowledging the fact that many small-business owners use loans as a crutch or a Band Aid for lingering business problems, Ms. Contreras-Sweet is taking a definitive step toward helping small businesses across the country grow responsibly and with purpose.
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