Meat + Poultry - April 2009 - 22

WASHINGTON

Opportunities loom in stimulus package
By Bernard Shire
meatpoultry@sosland.com

he American Recovery and Reinvestment Act of 2009, signed
into law in February by President Obama, is an effort to jumpstart
the American economy, create or save
millions of jobs and address challenges
to the American economy as a result of
the full-scale recession.
But one aspect of this "stimulus plan"
has gotten short shrift in the press: the
goal of helping small and very-small
businesses, including meat and poultry processing plants to expand, saving jobs in small business and creating
many additional jobs in small and verysmall businesses, which is the greatest site for jobs and job growth in the
United States.
While the stimulus bill isn't expected to have much effect on the large industry, the small industry is different.
Jay Wenther, executive director of the
American Association of Meat Processors, says most AAMP members are
small and very-small businesses. More
money will be available for meat and
poultry processors to expand their businesses, as a result of increased loans due
to the new stimulus law. More money
would also help ﬁnance new meat and
poultry processing businesses.
"The opportunities are there, especially through the expansion of the
Small Business Administration's 7(a)
loans via the stimulus package," Wenther says. "One AAMP member has already reﬁnanced his business through a
7(a) loan where he could put less down
and expand his business through more
favorable terms."

Loaded package
The Stimulus Act contains a package of
loan-fee reductions, higher loan guarantees, new SBA programs, secondary market incentives and enhancements to current SBA programs to help unlock credit
markets and begin economic recovery for
22

MEAT&POULTRY

April 2009

the nation's small business sector. The
new law gives $730 million to the SBA,
including $375 million for temporary fee
reductions or eliminations on SBA loans
and increased SBA guaranteed shares, up
to 90 percent for certain loans.
"Banks have been asking businesses
to put 40-50 percent down for loans instead of 20 percent," Wenther says. "With
this program, the amount down can
be lower. This may help members who
want to expand their businesses."
According to SBA, for 7(a) loans, the
maximum applied for can be $2 million;

" The opportunities
are there, especially
through the
expansion of the
Small Business
Administration's
7(a) loans via the
stimulus package."
for 504 loans, it is $2 million or $4 million. With the stimulus money, SBA will
now guarantee $1.5 million, or 75 percent of a $2 million loan. Fees are being
reduced or eliminated for the loans. The
agency says the increase in guarantee levels by the government will help provide
banks with the greater conﬁdence they
need to extend credit during the current
recession, and it will mean more capital
available to small and very small business
owners around the United States.
The U.S. Treasury Department is
also committing up to $15 billion to
help unlock frozen credit markets by
purchasing small business loan securities currently frozen on the secondary
market. By purchasing these securities,
these markets will be unlocked and in
turn, free up more capital to jump-start

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lending for small business owners. The
SBA has been working closely with the
Treasury Department to address the
need to unlock these secondary markets for SBA loans.
At the same time, businesses investing
in new plants or equipment may beneﬁt
from a pre-stimulus plan that's related to
"bonus depreciation" of new plants built
and equipment bought this year.
This part of the plan, which is related to constructing, expanding or upgrading business facilities or plants, the
stimulus law extends for a year Congressional action from last year allowing businesses to more quickly recover
their cost of new capital expenditures.
This plan is different from the normal
depreciation schedule by allowing businesses or plants to write off 50 percent
of the costs of depreciation expenses
for new plants and equipment.
Small meat and poultry processors
looking for this money should contact
their trade association or the Small Business Administration.
The stimulus law is also making
money available to American food assistance programs. The Women, Infants
and Children's program (WIC) will also
be given additional money by the stimulus plan. There will be $500 million
more in this ﬁscal year.
Senior nutrition programs will also
be given $100 million more for nutrition
services to the elderly, and $150 million
more will be distributed to food banks
across the United States. There will
also be $100 million more for schools
to buy or upgrade new foodservice
equipment.
Bernard Shire is M&P's Washington correspondent
based in Lancaster, Pa. With a background in editing and writing for daily news publications, he also
works as a food safety consultant and writer for
Shire & Associates.
We would like to hear from you - to comment on
this story or to request reprints, contact us by
e-mail at: meatpoultry@sosland.com.

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Meat + Poultry - April 2009

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