When the federal bailouts were announced last year, I like most people was outraged. There was certainly better ways to spend $700 billion we didn't have,especially when you throw the likes of AIG into the mix. But I did understand the rationale behind the plan. Allowing large financial institutions to fail would have created a global economic meltdown the likes of which has never been seen before.

With the recent news of CIT filing for bankruptcy and the continuing concerns over the viability of CitiGroup, the whole issue has been resurrrected in my consciousness. Was that money wisely spent? Couldn't at least some of that money been allocated for small businesses?

Over the course of the last twelve months, I have gone into a number of clients that were struggling to get by, barely surviving. They had taken all the measures they thought appropriate to save their businesses, but what they really needed was cash. But banks aren't lending money and access to any government funding was difficult.

Candidates from both sides of the political fence actively court the vote of the small business community; citing how vital small businesses are to the economy. But neither party seems to take any real action to help small businesses.

The ARC loan program available through the SBA is some what of a joke. $35,000 could help but really doesn't go too far even in the smallest businesses. And there is a requirement of three years in business.

Traditional SBA loans require a mountain of paperwork that small business either don't have or have trouble assembling. Many of my clients simply laugh when you mention the SBA.

Now I have heard there has been some loosing up in the SBA approval process but I have not seen much in the way of loans to those small businesses that really need them. But traditional SBA loans still go through banks and we all know what is going on with the banks these days.

Then there is the stimulus package. I was at a client earlier this summer. He had been award a $500,000 public sector project in November 2008 with a tentative start date of June 2009. He was advised in May because the project was now being funded by the stimulus package, he was required to be a union employer. He was given 48 hours to resubmit his proposal as a union shop in order to retain the project. Of course he was unable to do so and lost the project.

Remeber candidates salivate over getting the endorsement of labor unions. Non union employers do not constitute a voting block.

There is a distinct difference between how small businesses and large corporations react to downturns in their businesses.

In my experience with small businesses, the first thing owners do when times get tough, is to cut their own wages. If they own the building out of which the company operates, they stop making rent payments to themselves. They endeavor to do whatever they can to keep their employees on the payroll They often pay them to do busy work just to keep them working. They may take an equity line on their personal home to keep their business afloat. Basically the owner bears most if not all of the hardship caused by their business downturn.

Large corporations react much differently. The first action typically taken is to reduce staffing. Senior management continues to receive their large bonuses. The hardship is born by the companies stakeholders; employees, shareholders and creditors.

When things improve, small businesses are quick to hire back those employees they may have been forced to lay off. A recent client of mine has just hired back 2 of the 4 technicians he was forced to lay off a few months back because he has seen an increase in service calls. I was opposed thinking he was being premature in his decision. But my client was adamant. The "guys" had been with him for 15 years and had help him build his business. He was heart sick at having to had to lay them off.

Large Corporations typically do not hire back those employees they may have laid off in a downturn. They reclassify positions and rehire at lower pay rates. Or they hire consultants, often at exorbitant amounts, to redesign processes so they can operate without the positions they laid off. Large corporations typically don't have the same level of loyalty to their employees that small business seemingly do.

Point in case, a friend of a friend was recently released by her employer, a major bank whose name you would easily recognize. She is in her early thirties and has worked the bank for about 8 years. Her salary was in the mid -$50's. She was advised that her release was due to her position being downsized. Well, within two weeks her position was filled with the same responsibilities and same title but at an annual salary of $29K. She was not offered the opportunity to retain her position at the lower pay rate.

Say we took the equivalent of the bailout given to AIG - $85 billion and allocated that to a small business program. Now in my experience , most small businesses are in need of $100-$500K to restructure debt, improve marketing, pay down vendors, etc. So on average they are looking for about $300k. If you do the math, $85 billion = loans of $300K to 283,333 small businesses.

If each of these 283K+ small businesses were to hire or rehire 4 employees each that would create or restore over 1.1 million jobs.Now that would put a dent in the current unemployment rate, but it would be a start. What impact would $1.1 million employed households have on the economy? Making purchases they had put on hold. No longer requiring public assistance - i.e. unemployment, food stamps, etc. Contributing payroll and income tax dollars to the federal and state coffers.

Now there would need to be some control. I have spent some time perusing the federal job listings and the government is doing a lot of hiring. But i have yet to see any positions for the SBA listed. There are thousands of unemployed professionals or even consultants like me with the requisite skills to put a small business bailout program into effect. They could be hired as contract employees. They could be used to analyze, train, monitor and audit the small business recipients to ensure the funds are being used wisely to improve the business and create jobs.

Adding 10,000 professional resources at an average of $60,000 annually to the SBA in the form of contract employees to manage the program would cost the federal government under $1 billion. A drop in the bucket.

Now I am not so naive to believe that our politicians in Washington would even entertain such an approach. Small Businesses aren't front page news. When a small business fails, nobody hears about it, unlike when a large company closes a facility. Neither does it malke the nightly news when a small business creates a few new jobs. Small businesses simply lack the "WOW" factor that fuels political campaigns. It is unfortunate, but true.