To The Rescue
This story appears in the November 1998 issue of Entrepreneur. Subscribe »
As one Capitol Hill staffer puts it, small business is "doing the ostrich." Entrepreneurs are ignoring the Year 2000 (Y2K) problem, in which computers and embedded microprocessors in telephones and other equipment fail to recognize dates after December 31, 1999, causing havoc at the start of the new millennium.
In introducing a bill that would make $50,000 loans for fixing Y2K problems available, Sen. Christopher S. Bond (R-MO) said that testimony presented to the Senate Committee on Small Business, which he chairs, indicated that as many as 330,000 small businesses would shut down due to the Y2K problem and that an even larger number would be severely crippled.
Bond's "Small Business Year 2000 Readiness Act" (S.2372) would allow the 1,000 banks already participating in the SBA's Preferred and Certified Lenders programs to make loans of up to $50,000 with minimal paperwork. The SBA would guarantee 50 percent of the loans. The bill was introduced on July 30, just as Congress left for its August recess, limiting the possibility that it will pass before year-end.
Despite the imminent Y2K disaster, too many small businesses are keeping their heads in the sand. A study by Wells Fargo Bank showed that one in five small businesses has taken preventive action; another one in five plans to do so before January 1, 2000; two in five plan to do nothing; and one in five doesn't even know the potential problem exists.
The SBA provides educational materials via a Web site (http://www.sba.gov/y2k) and a toll-free phone number (877-789-2565), which is hooked up to a "fax-back" system.
"Time is running out," says Bond. "We need to begin a series of programs to help small businesses very soon if we intend to avoid a calamity in the year 2000."
Stephen Barlas is a freelance business reporter who covers the Washington beat for 15 magazines.
