Why Did Bush Slash Small Business Loan Programs, Harming African American-owned Businesses?
For five years in a row, President Bush declined invitations to address the annual NAACP convention. Every president for the past several decades had spoken to the Baltimore-based group. Until now, Bush, who received 11 percent of the black vote in 2004, had been the exception.
In light of the President's decision to finally speak to the members of this important organization, the DNC prepared a list of questions for the President. One in particular related to African Americans starting small businesses.
3. Why has President Bush slashed small business loan programs that have been crucial for African American-owned businesses?
It's important to unpack the question. President Bush has done a few key things that undermine work done in the previous administration that encouraged small business growth.
First, in January 2004, Bush stopped the Small Business Administration's 7(a) loan program. The most commonly used SBA loan program, each year it backed over $10 billion in loans to small businesses, especially those run by business owners who could not qualify for traditional bank loans. This was no small cut - in 2000, the 7(a) loan program helped more than 3,200 African American businesses with over $660 million in loans.
After a public outcry, the SBA announced that it would reinstate the program, but with a 63 percent cut in the maximum loan.
For his next trick, Bush slashed the Small Business Administration budget by 30%, and increased fees in every SBA lending program.
Democrats support small businesses because we know the contributions of the small business sector form the cornerstone of our economy. Small businesses also anchor our communities, provide local residents with jobs, and bring economic development to under served areas.
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