More than $730 million of the federal stimulus has been marked specifically for small business, and although the details remain scarce, a few business leaders agree that certain programs look promising.
"Some kind of spending, when it comes via the federal government or the state government, certainly offsets some of the reduced spending in the private sector," said Sudershan Shaunak, director of the Small Business Development Center in North County.
The government aid comes in the form of loan guarantees, financing, tax benefits and contract opportunities, among other things -- all designed to help businesses weather the economic downturn and retain their competitive edge.
The favored measures -- the ones that have elicited the majority of enthusiastic chatter -- are all in some way related to lending and make up the majority of the allocated funds.
For example, approximately $255 million under a new Small Business Administration loan program is available for business owners to pay off existing debt.
These loans of up to $35,000 under the America's Recovery Capital program, or ARC, do not require collateral, are interest-free, carry a 100 percent SBA guarantee, require no SBA fees and defer payment for more than year.
"It's unheard of," said Ruben Garcia, San Diego district director for the SBA. "One-hundred percent guaranteed? It's a no-brainer."
The SBA typically guarantees between 40 percent and 85 percent of loans -- depending on the size and type of loan -- meaning the agency takes on some of the lender's risk and theoretically makes lending easier and more appealing.
The SBA also usually charges between 2 percent and 3 percent in guarantee fees.
The applicant does have to prove that his or her business is "viable" and has the ability to survive past the downturn.
The funds are available from various SBA lenders on a first come, first serve basis until Sept. 30, 2010 -- unless the funds are used up before then.
"My recommendation is make the decision quickly and act on it," Garcia said. "There is a possibility that the funds will run out."
More than half of the federal stimulus dollars going to the SBA -- $375 million -- will allow the federal agency to guarantee up to 90 percent of other loans and reduce or eliminate the SBA fees.
Another $30 million will expand the SBA's microloan program, which provides small loans through community partners, or microlenders. The $30 million is enough to finance up to $50 million in new lending and $24 million in technical assistance grants to microlenders, according to the SBA Web site.
"We see a lot of businesses who have been out there and done well," Shaunak said. "It's not that their business model is bad; it's that they don't have customers walking into their stores right now.
"This type of loan will help tide them over."
However, SBA programs often depend on commercial lenders to disburse much of the funds, Shaunak pointed out, so a good deal ends up hinging on the willingness of a generally more tight-fisted financial community.
Also, rollout of the government funds remains slow, and because the popular ARC program is a new program, many local business organizations have yet to see the paperwork and the list of "dos and don'ts."
So local small business proponents encourage owners to prepare for other stimulus opportunities in addition to the SBA loan programs.
For example, look to offer a service in the alternative energy sector or seek out specific contracting opportunities, said Gary Knight, president and CEO of San Diego North Economic Development Council.
"Understand how the money is going to flow," Knight said, and "be one of the providers to the agency that's going to get it."
Other measures that may help small businesses, according to the South County Economic Development Council and the SBA Web site:
¥ An additional $15 million to expand the SBA surety bond program, which helps small businesses compete for public works projects.
¥ Tax credits for hiring unemployed veterans or disaffected youth, who were added to the federal Work Opportunity Tax Credit program.
¥ Creation of Recovery Zones, which target areas of declining unemployment by offering businesses tax incentives to operate and hire there.
¥ Tax write-offs of equipment purchases up to $250,000.
¥ Five-year operating loss carryback that allows businesses that incurred a loss in 2008 but paid taxes in prior years to secure a refund.
¥ Changes in the federal withholding schedule that give employees more take-home pay and delays the 3 percent withholding from government contractors until 2011.
¥ Availability of industrial development bonds for companies that produce intangible property. ¥ Ability for employees of service businesses and farms that are experiencing downsizing because of international competition to participate in the federal Trade Adjustment Assistance program.
¥ SBA-facilitated purchase of more SBA-guaranteed loans to improve secondary market liquidity.
¥ SBA-facilitated sale of 504 program first mortgage loans.
¥ Ability to use 504 loans to refinance existing fixed asset loans.
¥ Expansion of SBA investment program, the Small Business Investment Company, which uses raised capital to provide debt or equity financing to small businesses.