US Hispanic Marketing

But from the beginning, the forum’s breakout session dedicated to small business, led once again by the Small Business Administration’s Karen Mills and Treasury Secretary Timothy F. Geithner, was all about difficulties obtaining financing. “The credit market has totally been closed to us,” said Woody Hall, president of Diversapack, a packaging manufacturer with 700 employees in five states. Recently, he said, when the company built a new factory and created 50 new jobs — with 150 more expected in the next three years — “we could not get one bit of bank financing.”

Zoar Filwilder recounted how Chase Bank canceled the line of credit for his company, Mavid Construction of Scottsdale, Ariz., despite its good standing and swelled accounts. (”How quickly were you able to shift and find somebody else?” asked Mr. Geithner. Fairly quickly, it turns out: about a month.) Even Eric Schmidt, Google’s chief executive (presumably present at this session by virtue of the fact that Google, according to Mr. Schmidt, gets two-thirds of its revenues from small- and medium-sized businesses), suggested that modification of banking rules, “done cleverly,” could open up the spigot. Referring to his small-business customers, he said, “That’s the message they asked me to pass along.”

And so for most of the 90 minutes, the conversation around the conference table, in a meeting room in the Eisenhower Executive Office Building, focused on improving access to credit. Mr. Geithner quickly put the kibosh on an idea popular among Agenda readers: “We’re not going to have the government lend directly to small businesses,” he said. “It’s not something we can do.” Instead he wanted to focus on making S.B.A. programs and financing from the Troubled Asset Relief Program more palatable to bankers.

Joseph Stiglitz, the Nobel-winning economist from Columbia University, suggested simply compelling banks, particularly those that took bailout money, to make a certain percentage of small-business loans or otherwise show how they’re creating jobs with the loans they make. Then he also denounced the high exchange fees merchants pay to accept credit cards. “It’s a 2-percent tax. Imagine, you’re a small business, and your margin is small, and you’re giving half of that to the bank in exchange fees — how aggravating that is,” he said. “I think that legislation that would bring down charges in all ways, as a source of funds and a mechanism of payment, is essential.”

The discussion also touched on various tax incentives that might help spur jobs. Mr. Stiglitz was unenthusiastic about a payroll tax holiday and a job-creation credit, two proposals currently circulating in Washington. But he blessed a third, a proposal to allow small firms to carry back current losses to offset past-year profits that appears to be on the verge of becoming law. Mr. Stiglitz, however, suggested a qualification: It should be limited to firms making investments or hiring new employees. A general tax break to anyone with losses “could be a big gift to the banks, who people already feel have gotten some big gifts, as you know.”