Menu
Share
Share this story
Close X
 
Switch to Desktop Site

Don't target small business: Make good policies universal.

(Read article summary)
View video

Ann Hermes / The Christian Science Monitor / File

(Read caption) Deborah Jack walks Roxy outside City Place in Edgewater, NJ, while Chiara Storza walks Willie in the distance, in this January 2009 file photo. Both women worked on Wall Street before joining small business startup Fetch! Pet Care.

View photo

Slate's Jill Priluck has a good summary of the recently passed small biz legislation. I liked it even better when I saw that it references my summer research paper. But that's not why you should read it. It's not that the legislation is bad or will be ineffective. It's that entrepreneurs are impossible to target. Good policy needs to be universal (e.g. lower tax rates for all, not targets. Better roads for all. Better health care for all. You get the idea).

Startups drive job growth, but often, these high-impact firms rely not on debt-based lending like SBA loans, but rather angel-, VC-, or equity-based funding because lenders generally perceive them as too risky. Google's first outside funder, for example, was not a bank, but Sun Microsystems co-founder Andy Bechtolsheim.

In many cases, a startup won't be able to get a loan, even though the SBA is guaranteeing 90 percent of it. As a result, the SBA loans will help more mature small businesses that often don't recruit.

Add/view comments on this post.

About these ads

------------------------------

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link above.