AKRON—Politics aside—as if that's possible in an election year—the bill to help small businesses President Obama signed into law Sept. 28 should have a positive affect on smaller rubber companies.
The Small Business Jobs and Credit Act of 2010 creates a $30 billion fund within the Treasury Department to lend to community banks. Those smaller banks—which must have less than $10 billion in assets—would use the money to leverage up to $300 billion in loans to small businesses.
Naturally—did we mention it's an election year?—there are critics of the measure. Generally, they complain the law merely will increase the national debt, and cause more problems with the economy. They'd rather see lower debt and certainly lower taxes.
This law, however, is important because it addresses one of the worst problems of the current sluggish economy: the lack of credit.
Individuals have a hard time getting a loan from a bank today, and it's just as bad, if not worse, for small businesses. The government pumped billions into banking to prop up the failing economy, yet the banks generally are hoarding the money. Even companies with good credit histories that are on decent financial footing are hard-pressed to get loans.
The new law addresses that problem. It keeps the money out of the megabanks' hands, and instead spreads it among smaller banks that are more likely to help a local business. It also has strings attached so the money is used for the purpose it's intended.
For a small rubber shop that needs a loan to maintain or expand its plant or add equipment so it can compete in the ruggedly competitive rubber business, this could be a godsend.
Most small-business organizations lined up in support of this bill, which shows it should have merit. Even though it was forced through Congress by the Democrats against opposition mostly from Republicans, who traditionally favor business-friendly legislation.
But then, it is an election year.