Obama announces incentives for small business loans
President Obama gave small business some love when he announced he was expanding programs for the Small Business Administration on March 16, 2009.
"Our recovery in the present and our prosperity in the future depend upon the success of America's small businesses and entrepreneurs," he said.
The Obama administration announced it was increasing the amount it would guarantee to private lenders making loans under Small Business Administration (SBA) programs. Previously, the federal government would guarantee 85 percent for loans at or below $150,000 and up to 75 percent for larger loans. Under the new program, the government will guarantee up to 90 percent of all loans for a limited time.
Also, the government is waiving certain fees for both borrowers and lenders on some SBA-backed loans.
Money for the programs come from the economic stimulus package, formally known as The American Recovery and Reinvestment Act, and from money already approved for use by the Treasury Department.
Obama promised he would expand Small Business Administration loan programs. The SBA does not lend money directly, so these moves have the effect of expanding the program by increasing incentives for private lenders. These efforts are temporary, but Obama specifically said he would be outlining further steps on behalf of small businesses in the weeks and months ahead. For now, the Obameter moves to Promise Kept.
Small Business Administration, Financial Assistance
White House Web site, President Obama and Secretary Geithner Announce Plans to Unlock Credit for Small Businesses , March 16, 2009
American Banker, SBA loan market has a stimulus of its own (subscription required), March 17, 2009
Washington Post, Small business lending gets a boost , March 17, 2009