An April 17, 2011 article in the Fiscal Times (Crowdfunding Promoted to Help Small Businesses) did a good job explaining the current problem facing startups and small businesses when they are trying to raise money.  As this article points out, everyone in government is hoping that small businesses will lead our country out of this recession.  However, in order to grow and expand, small businesses need capital.  According to the Federal Deposit Insurance Corporation (FDIC) outstanding lending to small businesses continues to fall steadily.  It peaked  at $336 trillion in 2008 and has steadily fallen to $291 trillion at the end of last year.
This fall in lending to small businesses also coincides with the fall in job creation by newly formed businesses over the last 2 years. Â Government officials have proposed providing $1.5 billion in funding for small businesses. Â This is good in the sense that it gets more money into the hands of businesses that will use it to improve the economy. Â However, this government spending only worsens our huge deficit that we are currently dealing with. Â If the government could pass this startup exemption it would get money into the hands of the people who can create jobs while not having the government spend anymore taxpayer money.
