Some Relief for Small Business is Coming

Posted on | March 15, 2009 | 1 Comment

The White House will provide billions of dollars in federal lending aid for small business owners. 

Finally!

The effort will be announced Monday and reportedly will include $730 million from the stimulus plan that will go to reduce small-business lending fees and increase the government’s guarantee on some Small Business Administration (SBA) loans to 90 percent. The government will also try to boost bank liquidity with more than $10 billion for the secondary credit market.

President Obama and Treasury Secretary Timothy Geithner will announce the new efforts Monday.  The US Chamber of Commerce supports the new efforts.

With income taxes set to rise significantly on small business owners in 2011, small businesses need all the help they can get.  Small businesses in need of capital are hurting, even though it is the small business community that creates most of the jobs and stimulus in our economy.  Republicans have lobbied the White House hard in recent weeks to shift more of the stimulus plan money away from big projects and large institutions and toward small businesses.

The amount of SBA guaranteed loans has dropped in the past year from $20 billion to just $10 billion.  That is clear evidence that credit available for small business development is much harder to find today.

When details of the plan are announced Monday, I’ll add another blog post to comment and explain.

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