The Dallas City Council has approved a $1 million loan program that is designed to assist small businesses in southern and western Dallas get capital for growth. The program, which will provide $1 million from the city’s public/private partnership fund to the Southern Dallas Development Corporation was approved unanimously with only one dissenting voice. But will this program go far in stemming the tide of job losses and corporate bankrtupcy that is creeping across the Dallas-Fort Worth area?
City Council member Dave Neumann doesn’t think it will and thinks that the city has overstepped its boundaries by attempting to create markets where private investors have shown no interest.
“The city’s role is not creating markets. The city’s role is to provide essential city services,” Neumann said.
One of the biggest concerns about the new loan program is that it might not go far to stop the slide into bankruptcy of many of these small businesses which have been struggling since the beginning of the recession. The reality is that many companies, big and small are filing bankruptcy because their revenue has decreased significantly due to customers pulling back on spending. Will this loan program do much more than delay the bankruptcy of businesses which are already drowning in debt? Probably not. While small businesses account for a large share of the jobs created in this country, the significantly reduced customer spending has created a reality where more loans for some businesses will only help to keep them afloat a little longer before they are forced to file Chapter 11 bankruptcy to reorganize their debts or to liquidate their business in Chapter 7 bankruptcy due to an evaporating customer base.