Small businesses have been crying for help getting loans for two years now. And finally, help arrives from an unexpected quarter: global investment banking and securities firm Goldman Sachs is teaming with savvy American investor-icon Warren Buffett to offer $300 million in financial aid to small businesses, coupled with $200 million more for college-level training for entrepreneurs.
The initiative, dubbed 10,000 Small Businesses, will pump the funds into Community Development Financial Institutions, or CDFIs. CDFI managers will then make the loans.
The program kicks off in New York, with first funding going to CDFI Seedco Financial Services, and training at the Small Business Development Center based at La Guardia Community College in Queens.
CDFIs have already been in the news recently, as the stimulus bill jacked up the federal funding contribution to these community lending institutions from the $50 million level of the Bush era to $400 million. Large lumps of cash granted to CDFIs see their impact greatly magnified in the marketplace, as each dollar tends to leverage another $17 or so of private investment.
There's been plenty of cynical reaction in the blogosphere to the announcement. Is Goldman's plan simply a PR move to help distract the public from the billions in bonuses they gave their execs shortly after taking federal TARP funds? Do business owners care if the new funds will actually help small businesses? Will it really help small businesses? Weigh in with your opinion.
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