On November 18, 2009, Goldman Sachs announced it was investing $500 million to provide grants and loans to thousands of small business. The program, called the "10,000 Small Business Initiative," is a charitable effort on the part of Goldman Sachs. It will include $200 million in funding for grants through community colleges, universities and other institutions. Some of the funds will be used for counseling; other funds will be used for grants and loans.
The advisory council for the program includes the head of Goldman Sachs, Lloyd Blankfein; financier extraordinaire, Warren Buffett; Harvard Business School’s professor and head of the Institute for Strategy and Competitiveness, Michael Porter; head of the American Association of Community Colleges, George Boggs; and NFIB president, Dan Danner.
LaGuardia Community College in the borough of Queens, NY, will be the first community college to receive grant money to disburse; this college also houses a Small Business Development Center, Seedco Financial, a national community development organization, will also receive funding to make loans in the New York area beginning early in 2010.
While this program may be a PR effort on the part of Goldman Sachs, a company portrayed in the media as “greedy” because it’s been highly profitable during the recession and it has paid astronomical bonuses, may still be a worthy endeavor to help the small business sector. However, this may simply be a net sum gain—Goldman, along with other large banks (many of them TARP recipients), have actually cut lending to small businesses (the Treasury reports that its loans were reduced by $10.5 billion over the past six months).
Meanwhile, the government is trying to figure out how it can better serve the small business community when it comes to credit. On November 18, 2009, the Treasury and the SBA hosted a Small Business Financing Forum in Washington, DC. Present were Treasury Secretary, Geithner, SBA head, Stephanie Mills, various other government officials, and a number of small business owners from across the country. Clips of the program, which was streamed live from the White House, should be archived here. Geithner’s remarks discuss some government efforts, including encouragement to community banks to step up their lending activities.