University study considers how to grow small, medium businesses

University researchers may have the answer for U.S. businesses that were growing but have been thwarted by lack of access to capital.

A three-month research project by the University of Denver’s Daniels College of Business and Leeds School of Business at the University of Colorado-Boulder shows that a program called the Incentivize Success Plan would motivate successful companies to expand their businesses and hire/retrain laid-off workers.

However, the plan is not a bail-out for struggling companies.

It is designed to help grow businesses with less than 500 employees gain access to capital.

The plan would have three components: low-interest government-guaranteed loans, 1 percent rate discount on borrowing rates, and a tax credit for retraining U.S. workers.

Research included the administration, design, costs and benefits associated with such a plan, and whether there is a tangible need for it.

Leeds and Daniels researchers reached the following conclusions:

  • There is clear evidence that capital constraints for businesses are inhibiting the growth of the economy. But the IS! plan offers a realistic way for banks to increase lending, so U.S. companies can grow.
  • The plan is designed to be universal – without being political, industry-bound or geographically bound. And it also supports companies that exhibit growth, but have financial credit constraints that inhibit growth potential.
  • By the second year, the plan would be fiscally revenue positive, given the income taxes and business taxes due to economic growth.
  • The projected $15 billion for the plan is expected to have significant economic impact – including 978,196 jobs created and a $595.4 billion increase in gross domestic product over five years, with a positive return on investment for taxpayers.

Researchers expect that phase two of the project will provide “actionable research for policy makers” at a critical time for the economy.

2 Responses to University study considers how to grow small, medium businesses

  1. yeah,
    Incentivize Success Plan would motivate successful companies to expand their businesses and hire/retrain laid-off workers.

    business services
    October 15, 2009 at 9:20 pm

  2. As long as John Sie is behind this initiative it has a solid chance of being heard. He has proven many times before that he tilts when he should withdraw and win when others only find ways to lose. I applaud his efforts.

    DCharm
    November 11, 2009 at 1:53 pm