Resurgent Microloan
Aug 23rd, 2009 | By Dawn R. Rivers | Category: Politics & PolicyWhat a difference an Administration makes (with apologies to Dinah Washington). It wasn’t so very long ago that the microenterprise development industry was hanging on like grim death, lobbying desperately to fend off the attempts of the Bush Administration to rid itself of the SBA Microloan program for good. The fortunes of microfinance in the United States began turning around when the financial markets imploded late last year. With bank credit practically frozen, suddenly all the major news outlets were carrying tear-jerker stories about small businesses whose survival was threatened by their inability to get a loan. Microenterprise development organizations were among the few outfits still lending. Suddenly, small business owners were flocking to Microloan Intermediaries in search of that elusive access to capital.
The other thing that happened to bring good times back to Microloan was that a new president got sworn in. Given the President’s background as a community organizer, it might be considered delightful but unsurprising that, between the fiscal 2009 budget appropriation and the American Recovery and Reinvestment Act, Microloan was suddenly flush with cash. Its appropriation, between those two bits of legislation, supports $70 million in loans and provides for $44 million in technical assistance grants. In addition, the SBA is finally expanding the program with the announcement last week of eight new Intermediaries. The evident commitment from the SBA to expand the number of microlenders, adequately fund the program, and encourage small business owners to use it may mean that Microloan could live up to its potential at last.
