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President Obama and Secretary Geithner Announce Plans to Unlock Credit for Small Businesses
White House web site ^ | March 16, 2009

Posted on 03/16/2009 3:06:13 PM PDT by cc2k

THE WHITE HOUSE

Office of the Press Secretary

_________________________________________________________________________
FOR IMMEDIATE RELEASE                                   March 16, 2009

President Obama and Secretary Geithner Announce Plans to Unlock Credit for Small Businesses
Emphasizes Recovery Efforts Already Taken by SBA to Expand Access to Capital for Small Businesses

WASHINGTON, DC – Today, as part of an effort Treasury Secretary Geithner first outlined in introducing the Financial Stability Plan (FSP) in February, President Obama and Secretary Geithner will announce plans to take immediate action to help ensure that credit gets flowing again to entrepreneurs and business owners. As another part of the Consumer and Business Lending Initiative, by the end of the month the Treasury Department will begin making direct purchases of securities backed by SBA loans to get the credit market moving again, and it will stand ready to purchase new securities to ensure that community banks and credit unions feel confident in extending new loans to local businesses. These purchases, combined with higher loan guarantees and reduced fees, will help provide lenders with the confidence that they need to extend credit, knowing they both have a backstop against their risk and a source of liquidity. These measures will complement other steps the administration is taking to help small businesses recover and grow, including several tax cuts under the Recovery Act.

The Obama Administration firmly believes that economic recovery will be driven in large part by America’s small businesses, which have generated about 70 percent of net new jobs annually over the past decade. But as the flow of credit has dried up during this recession, small business owners who were prudent and responsible have been set back by the behavior of others in our financial system who were not. Businesses with strong credit histories have seen loan applications denied due to conditions that have nothing to do with their own actions and are now struggling to expand their businesses, make their payments or even keep workers on their payrolls. As a result, while the U.S. Small Business Administration (SBA) typically guarantees about $20 billion in loans annually, new lending is trending below $10 billion this year.

The Obama Administration has already taken several positive steps to ensure that small businesses have access to the credit they need to support an economic recovery. The American Recovery and Reinvestment Act signed by the President provides for increased guarantees and reduced fees for certain Small Business Administration loans. In February, the Treasury Department made a special effort under the Consumer and Business Lending Initiative to improve terms for securities backed by SBA loans in the TALF.

  1. Jumpstart Credit Markets For Small Businesses By Purchasing Up to $15 Billion in Securities
  2. Temporarily Raise Guarantees to Up to 90 Percent in SBA’s 7(a) Loan Program: The purpose of the 7(a) loan program is to provide a government guarantee that reduces the risk lenders face when they make loans to borrowers who cannot find credit elsewhere. But during the current recession, the guarantees – up to 85 percent for loans at or below $150,000 and up to 75 percent for larger loans – have not been large enough to give banks the confidence they need to lend. As part of its implementation of the Recovery Act, the SBA today announces:
  3. Temporarily Eliminate SBA Loan Fees to Reduce the Cost of Capital
  4. Call by Secretary Geithner for New Reporting Requirements on Bank Lending to Small Businesses and Greater Efforts to Extend Small Business Loans
  5. Issue Guidance for An Expanded Carryback Provision as Part of the Recovery Act’s Comprehensive Tax Cut Package for Small Businesses:


TOPICS: Business/Economy; Front Page News; Government; News/Current Events
KEYWORDS: bho44; bhosba; geithner; smallbusiness
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To: cc2k
THE WHITE HOUSEOffice of the Press Secretary _________________________________________________________________________ FOR IMMEDIATE RELEASEÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â

Notice: The people responsible for producing these credits have been sacked.

                                Â

Notice: The people responsible for sacking the people responsible for producing these credits have been sacked.

21 posted on 03/16/2009 3:59:16 PM PDT by rfp1234 (Phodopus campbelli: household ruler since July 2007.)
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To: April Lexington
April Lexington wrote:
This is more kooky Obamanomics...

Debt is a big part of the problem. Small business is up to its eyeballs in debt.

Yes, But he's proposing that more debt is the answer now.

I posted on the thread "Remarks by the President to small business owners community lenders and members of Congress," but I'll put something here as well.

Pres__ent Obama said today:


“So with this action, any lender that provides SBA small business loans will have a buyer for those loans. And in turn, community banks will no longer have to choose between providing loans to creditworthy small businesses and maintaining the required capital and liquidity.”
It looks like he's proposing a secondary buyer (GSE, like Fannie and Freddie?) for small business loans and "securitize" them. This worked so well for mortgages, let's do it for small business loans as well.</sarcasm>

And of course, once the government is buying these loans, the banks will have to loan to a diverse assortment of borrowers. And they will probably require banks to lower standards to promote "diversity."

22 posted on 03/16/2009 4:09:58 PM PDT by cc2k (When less than half the voters pay taxes, it's called "taxation without representation.")
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To: cc2k

Get down on your knees and be thankful, small business. And oh yes, you have to kiss the ring too. Don’t forget to fill out the union rep contact sheet on your way out the door, too.


23 posted on 03/16/2009 4:13:01 PM PDT by dr_who
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To: cc2k
Obama is just so urban to the core. He simply doesn't understand business.

Who in the heck would borrow money in this economic climate? Only those desperate to stay afloat are looking for money and they are likely the worst credit risk. So, whoever buys these loans is buying huge risk of default. Just like the sub-prime mess that Geithner can't fix. This program is stupid.

The only thing that will get business owners to take the risk of hiring people and buy equipment and inventory is a growing economy. We don't have that right now. So, how will this new loan program help business????

Answer... It won't it will just bring businesses that take the money under the control of the federal government. Then, the rules start to apply regarding salaries, bonuses, who you can hire, etc...

24 posted on 03/16/2009 4:22:48 PM PDT by April Lexington (Study the constitution so you know what they are taking away!)
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To: EQAndyBuzz

Yep, too easy


25 posted on 03/16/2009 4:32:12 PM PDT by freekitty (Give me back my conservative vote.)
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To: cc2k

Call for Quarterly Reports of Small Business Lending By All Banks:

Thanks but no thanks is what many will tell them.


26 posted on 03/16/2009 4:45:12 PM PDT by mojitojoe ( Idiots elected a Marxist ideologue with narcissistic personality disorder & America is dying.)
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To: ViLaLuz

Because the debtor is slave to the lender.
_____________
AMEN.


27 posted on 03/16/2009 4:49:32 PM PDT by mojitojoe ( Idiots elected a Marxist ideologue with narcissistic personality disorder & America is dying.)
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To: April Lexington

FU** NBC


28 posted on 03/16/2009 4:56:58 PM PDT by peace with honor
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To: cc2k
What a line of BS!

Here's something the Obama administration neglected to mention:

Few Small Business Owners Seek SBA Loans

While the Small Business Administration reports that it will receive $630 million from the American Recovery and Reinvestment Act for loan programs and loan fee reductions, most small businesses would not seem to be interested. When asked if they had ever applied for an SBA loan, 90 percent of owners said no.

If SBA loans became easier to get, 58 percent of small business owners say it is not very likely or not likely at all that they would apply; 40 percent said it was very likely or somewhat likely that they would apply; and 2 percent were unsure.

http://www.discovercard.com/business/watch/

SBA loans are completely out of reach for most small businesses and require that the business owner put up their own, personal assets as collateral. More:

The SBA uses the following criteria to determine whether a business qualifies as a small business that is eligible for SBA loan assistance:

Construction: Average (three years) annual sales or receipts of not more than $33.5 million, depending upon the specific business type
Manufacturing and mining: Not more than approximately 500 employees
Retail or service: Average (three year) annual sales or receipts of not more than $35.5 million
Wholesale: Not more than 100 employees
Special trade contractors: A limit of $14 million
Agricultural industries: A limit of $.75 million

The SBA loan program will not provide funds for businesses that are able to obtain or provide their own financing. Alternative resources for funding, including personal assets, if available, must be used first.

The administration is pressuring banks to issue more SBA covered loans, and accept additional oversight from the very people who brought you the banking crisis to begin with.

29 posted on 03/16/2009 5:38:18 PM PDT by GVnana
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To: AdmSmith; Berosus; Convert from ECUSA; dervish; Ernest_at_the_Beach; Fred Nerks; george76; ...

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30 posted on 03/16/2009 6:30:14 PM PDT by SunkenCiv (https://secure.freerepublic.com/donate/____________________ Profile updated Monday, January 12, 2009)
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To: cc2k

I bet the real plan is; loan them money they won’t be able to pay back, then take over their businesses as punishment.


31 posted on 03/16/2009 9:17:36 PM PDT by RWB Patriot ("Let 'em learn the hard way, 'cause teaching them is more trouble than they're worth,")
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To: EQAndyBuzz
Why don’t they just reduce taxes on small business?

You been drinking?

32 posted on 03/16/2009 9:22:02 PM PDT by Extremely Extreme Extremist ("President Obama, your agenda is not new, it's not change, and it's not hope" - Rush Limbaugh 02/28)
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To: GVnana
Great idea! Your business is under water so you borrow more money and increase your monthly debt service!

Gotta love Obamanomics!

33 posted on 03/16/2009 9:58:23 PM PDT by April Lexington (Study the constitution so you know what they are taking away!)
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To: cc2k

What a crock! Look at a all the negative impact the Obunch is putting on small business and everyone else. There won’t be anything left to stay in business or purchase business products. They are wrecking this country for their own idiology.


34 posted on 03/16/2009 9:59:23 PM PDT by Jukeman (.)
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To: cc2k

The only good thing about this plan is that our highly leveraged competitors will be cratering if they take this money...


35 posted on 03/16/2009 10:00:13 PM PDT by April Lexington (Study the constitution so you know what they are taking away!)
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To: Doogle

But....but....but....only businesses/individuals earning over $250K will get a tax increase....90% of all small businesses will not see a tax increase!!!

What these freaking idiots don’t understand is the businesses that are doing + $250,000.00 are the ones who are MORE likely to employ people. And as the taxes on those businesses increase, less jobs will be retained/created!

To this bunch low taxes are like garlic to a vampire.


36 posted on 03/16/2009 10:02:09 PM PDT by GatorGirl (Proud Citizen of the Gator Nation!)
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To: GatorGirl

correctamundo


37 posted on 03/16/2009 10:06:46 PM PDT by Doogle (USAF.68-73..8th TFW Ubon Thailand..never store a threat you should have eliminated))
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To: cc2k

Say it loud, say it PROUD:

O ne

B ig

A ss

M istake

A merica!


38 posted on 03/17/2009 6:12:26 AM PDT by 2harddrive (...House a TOTAL Loss.....)
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To: cc2k

How many of these “loans” will go unrepaid just like mortgages. Looks like the same deal to me.


39 posted on 03/17/2009 7:27:23 AM PDT by tet68 ( " We would not die in that man's company, that fears his fellowship to die with us...." Henry V.)
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