President Obama Announces Plan to Boost Small Business Lending

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 from 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 the sale to make new loans to other small business. However, investors have not been interested in buying these loans. This means banks have not been able to make as many loans to help struggling these businesses.

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.

For more information on the stimulus and small business lending, visit SBA’s Recovery Page.