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President Obama's Plan to Boost Small Business Lending

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President Obama's Plan to Boost Small Business Lending

By BobK
Published: March 16, 2009

Earlier today, President Obama and Treasury Secretary Geithner announced a plan to free up credit markets to help the nation’s struggling small businesses.

The plan includes a release of $375 million for small business lending provided in the economic stimulus plan, which will increase the maximum SBA loan guarantee to 90 percent, and temporarily waive fees paid by borrowers.

Primary bank lenders often sell SBA loans in the secondary market, and use the proceeds of these sales to make new loans to other small businesses. However, investors have been reluctant to buy these loans. This means banks have not been able to make as many small business loans.

As a measure to unfreeze the secondary credit market, the President announced the U.S. Treasury will invest up to $15 billion in securities backed by SBA loans.

Visit the U.S. Dept of the Treasury's Unlocking Credit for Small Business Factsheet for more information.

Message Edited by BobK on 03-16-2009 03:05 PM

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Will the 90% SBA guarantee on business loans include 504 loans?   If so, has the 10% down payment been lowered for the borrower? Will this plan have any affect on lowering interest rates on SBA guaranteed loans? 
ConstChick, Some states are using the stimulus money to help guarantee lines of credit, which are intended to help business suffering as a result of the credit crunch. For example the New Jersey Main Street Business Assistance Program guarantees a lines of credit up to 50%. You can check what's going in your state by visiting the Recovery.gov site. BusinessWoman, There does not appear to be anything in the President's plan or the stimulus that specifically mentions helping those with low credit scores, however, the intended purpose of this plan is to open up credit markets in order to provide financial assistance to struggling businesses. Historically, borrowers of government guaranteed loans had lower credit scores than those borrowing through traditional lending channels. I recommend contacting one of SBA's District Offices. Experts there can refer you to one of SBA’s resource partners who have business development experts who can tell you the steps you can take to repair your credit so you are able to qualify for a loan. Message Edited by BobK on 03-18-2009 07:45 PM
Will the recovery process address and consider  credit issues that small disadvantaged businesses are now facing?
A 7(a) loan can be used for real estate, Equipment with up to 25 year terms and working capital with up to 7 year terms. Can a business get both a real estate loan and a working capital loan?  I would like to refinance the current assets, Machine Shop equipment (turning centers, machine centers etc) and include the buying of land and constructing a new building.  I currently rent.  I would also like to get a working capital loan to get me through the middle of next year.  This assumes the business economy will remain slow thru the middle of next year.  Thanks
What my small business needs is working capital to get thru the lack building phase.  By our state using the stimulus money for road construction that does not help out people you supply building materials for building.
I strongly believe the US Treasury should start lending directly to small businesses.  Banks are hording cash to bolster their balance sheet to hedge against a worsening in the economy.  As such they are very reluctant to loan to small businesses.
Nevertheless, investors have been reluctant to purchase these loans. This has a meaning that banks have not been able to make as many small business loans. It is an evident fact.Academic papers Message Edited by NicoleD on 09-30-2009 12:55 PM
As a measure to unfreeze the secondary credit market, the President announced the U.S. Treasury will invest up to $15 billion in securities backed by SBA loans. It is an excellent action I must say. Governments must invest money in security organizations.Custom research paper Message Edited by NicoleD on 09-30-2009 12:55 PM
Im on a government program called the New Enterprise Incentive Scheme, here in Australia. It has helped me alot, we get income aswell as our own mentor to help with business activities.Regards,<a href='http://www.musclemass.com.au'>Bodybuilding Supplements</a> | <a href='http://www.magictricks-revealed.com'>Magic Tricks Revealed</a>
I'm trying to understand the 378 Million figure in light of small business size standards as outline in this table of business size standards. Is there current publicly available reporting of what industries have received what percentage of SBA loans in the past?

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