Small business seeks help in U.S. economic storm

By Edward McAllister and Donna Smith

NEW YORK/WASHINGTON (Reuters) - U.S. small businesses say they feel slighted by the Obama administration and efforts to shore up the economy, with large companies taking much of the government's attention and stimulus cash.

The government decision last week against bailing out small business lender CIT Group raised fears of thousands of companies left without funding for day-to-day operations, and the lack of support showed big corporations can get bailout cash but small business interests are less pressing, some say.

With only some potential relief buried in the healthcare reform proposals in Congress, small businesses feel pushed aside in the stimulus and recovery efforts, they say.

"There has been nothing really in all the stimulus package that has really helped small business in general," said Kelli Glasser, president of Exhibit Concepts in Dayton, Ohio, whose 87 employees build trade show and museum exhibits.

"Most of the help has been in the form of supporting loans, but we're not looking for loans right now," she said. "We're not looking to heavily invest in equipment. We're just trying to keep our doors open."

Small business is not that small, representing 99.7 percent of all U.S. employer firms.

The U.S. Small Business Administration got $730 million this year to recharge the small business lending market, nearly doubling its budget. However, some say the package was not well structured and dwarfed by the $180 billion the government committed to save insurer American International Group.

'HAVING A TOUGH TIME'

"Only $730 million going to the SBA didn't really help the small business owners," said James Tracy, president of America's Best Companies in Illinois, which represents small businesses nationwide.

"Small business owners are having a tough time financing themselves today because I believe that the stimulus plan should have allowed for more loans to small business owners," he said.

A $15 billion administration plan to buy small business loans for resale on the secondary lending market has not taken effect, in part because market activity picked up after the plan was announced in March, the administration says.

The Obama administration wants small businesses to come out ahead in the reform effort, said Melody Barnes, a domestic policy advisor at the White House.

"We absolutely want to make sure that small business owners and small business can continue to thrive," she said in an interview with Reuters Television.

But applying for a small business loan can be more trouble than it's worth, said Joe Olivo, owner of Perfect Printing in Moorestown, New Jersey, who said his bank advised against it.

"The paperwork was so onerous that my bank told me it was not worth my effort to try and get that money," Olivo said.