Financing Small Business in America

by Hamlin, Roger E.

• ISBN13: 9780275976736
• ISBN10: 0275976734
• Format: Hardcover
• Copyright: 2003-10-30
• Publisher: Praeger Pub Text

Summary

Examining the role of the public sector in small-business debt-capital formation, this book describes current approaches, conceptually and pragmatically, and evaluates their advantages and disadvantages from a variety of perspectives. It also suggests a model for improving our approach to small business capital formation in the United States. Financing small business creation and expansion has always been difficult. Private debt capital providers tend to avoid small business because the latter are preceived to be too risky. Yet because of the importance of small businesses to national economic growth, stability, and innovation, ensuring that these businesses can obtain and effectively use appropriate levels of debt capital is vital to national well-being. How, and to what extent, should the public sector intervene in the debt capital markets to ensure that sufficient capital flows to small businesses? This book is an attempt to answer that question.

Author Biography

ROGER E. HAMLIN is Professor of Urban and Regional Planning, Professor of Public Administration, and Research Fellow in the Institute for Public Policy and Social Research at Michigan State University. He and Thomas S. Lyons are co-authors of Creating an Economic Development Action Plan: A Guide for Development Professionals, Revised and Updated Edition (Praeger, 2001), and Economy without Walls: Managing Local Development in a Restructuring World (Praeger, 1996).THOMAS S. LYONS is Associate Professor of Urban and Public Affairs, University of Louisville. He is the Director of the Master of Urban Planning Program and founding Director of the Center for Research on Entrepreneurship and Enterprise Development.

Table of Contents

Illustrations	vii
Introduction	ix
U.S. Small Businesses and the Global Economy	1	(14)
The Importance of Small Businesses to the U.S. Economy	1	(6)
The Challenges Posed by the Global Economy	7	(4)
Implications for Enterprise Development Assistance	11	(1)
References	12	(3)
The Importance of Debt Capital to Small Business	15	(18)
The Role of Capital Formation in Small Business Success	16	(5)
The Relationship Between Capital Formation and Small Business Incubation	21	(1)
Debt Capital as an Aspect of Capital Formation	22	(5)
Governmental Involvement in Small Business Debt-Capital Formation	27	(4)
References	31	(2)
Current Approaches to Debt-Capital Formation: Micro- and Direct Lending Programs	33	(18)
Micro-lending/Microenterprise Programs	34	(2)
Microenterprise Program: How the Program Works	36	(8)
Direct Government Lending	44	(3)
References	47	(4)
Indirect Approaches to Leveraging Private Capital	51	(84)
Loan Guarantee Programs	52	(17)
Loan Insurance Pooling: The Capital Access Program	69	(33)
Loans with Kicker Features: BIDCOs	102	(12)
Subordinated Lending: Certified Development Corporation Loans	114	(16)
Shortcomings of Current Practices	130	(3)
References	133	(2)
Summary and Conclusion	135	(6)
Summary	135	(2)
Conclusion	137	(3)
References	140	(1)
Index	141