del.icio.us
Digg
Sphere
Stumble
Technorati
Twitter
In Which The Gov't Listens To Its Critics
By Marc Tracy
That didn't take long! On Thursday, we wrote a post about a new Small Business Administration rule concerning a cap on a certain type of loan it offers to those wishing to buy small businesses, and the poor reception it had received (of course, we were also contributing to said poor reception, but hey, what're you gonna do?).
Well, guess what? The SBA has decided that it might be a good idea after all to take six more months and think about this decision: the rule change, originally scheduled to go into effect yesterday, will instead be clarified by August 31, Sharon McLoone reports.
The SBA cited many of the same reasons we (and others) pointed to in questioning the wisdom of altering the agency's so-called "goodwill" loans in an apparent effort to discourage the purchasing of small businesses right now. Chiefly, the agency seems to have realized that purchasing a business can be a pretty good substitute for getting a new job, and that's not exactly something to be frowned upon in this labor market.
In fact, by its own admission, the agency appears not to have done the necessary homework: though it collected extensive information and data on business acquisitions, in its research into financing it did not distinguish between the amount or proportion of goodwill--a business's intangible assets, such as its brand, plus its cash-flow--versus non-goodwill in those acquisitions. This would seem to be a relevant omission, given that the rule had entirely to do with goodwill financing.
We wish we could take credit for this (and we wish even more that we could credit Sharon McLoone over at our sister site washingtonpost.com, who beat us to both stories). That said, it's hard to believe that the most effective critic in terms of causing the SBA to think twice wasn't the leadership of the U.S. House Small Business Committee, who contacted the agency Friday to protest. As Rep. Nydia Velazquez (D-N.Y.), the committee chairperson, told McLoone, "Credit markets are tight enough as it is and this proposed policy would only make things worse. The ultimate impact of this rule change would be to make it harder for small businesses to access capital."
We'd only add that it is heartening, after eight years in which it sometimes seemed in doubt, to see genuine accountability and transparency in government. Which is not to say we wish it hadn't made the wrong decision in the first place. But still, this somehow feels like an improvement.
Comments (0)March 2, 2009 10:07 AM
