Access to capital is a major problem for start up businesses and businesses trying to expand.  As a result many start up businesses end up using credit cards which is a very expensive way to get capital.

While there are some programs available like the Small Business Administration 7A and 504 programs.  The federal government has eliminated all subsidies in these programs increasing the cost to small business borrowers.  As a result of this change, 50% of the banks making SBA loans when the subsidies existed are no longer making loans.  They also have centralized the processing of many of these loans making it more difficult for small businesses to explain the unique circumstances of their business.  Another problem small businesses are facing is that with the mergers and acquisitions of banks, small  business  loans are decreasing.

At the state level there are a number of programs like the Small Business Loan Guarantee Program, California Capital Access Program, Industrial Development Revenue Bond Financing Program, Small Business Pollution Control Tax Exempt Bond Financing Program, Replacement of Underground Storage Tank Loan Program, etc., but there is very little funding and the needs of small businesses are clearly not being met.

Small Business California is supporting two ways to increase capital to small business.  First, Small Business California believes that money should be made available through Cal Pers.  This is already being done to some degree for businesses that provide solutions to environmental problems.  It should be expanded to other small businesses.