President Obama's Plan to Boost Small Business Lending
by BobK, Community Administrator
- Created: March 16, 2009, 2:44 pm
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.
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