Obama Proposes New Steps for Small Business Loans
Help is on the way for small business, according to President Obama. In a speech delivered at a small business in Landon, Maryland this week, the President outlined new initiatives for small business to ease up lending and to make critical capital available at affordable rates.
Here are a few notable points President Obama mentioned in his speech:
- "Over the past decade and a half, America's small businesses have created 65% of all new jobs in this country."
- "Our small businesses have been some of the hardest hit by this recession. From the middle of 2007 through the end of 2008, small businesses lost 2.4 million jobs."
- "So far, the Recovery Act has supported over 33,000 loans to small businesses that have already helped save or create nearly tens of thousands of jobs - nearly $13 billion in new lending. More than 1,200 banks and credit unions that had stopped issuing SBA loans when the financial crisis hit are lending again today. And more than $4.3 billion in federal contracts is now going to small businesses."
- "But there's also no question that we have a long way to go. There is still too little credit flowing to our small businesses. There are still too many entrepreneurs who can't get the loan they need to open their doors and start hiring. There are still too many who are struggling to make payroll and stay open. And there are still too many successful small businesses that want to expand further and hire more but just don't have the capital to do it."
- "Today, we're also taking additional steps to boost credit for small businesses through our Financial Stability plan. The major banks that were in critical condition a year ago need no new assistance from the government, and so we are winding down that portion of the TARP program. But to spur lending to small businesses, it's essential that we make more credit available to the smaller banks and community financial institutions that these businesses depend on."
The President also outlined his proposals to support small businesses and small business loans:
- Increasing the size of SBA's 7(a) loan from $2 million to $5 million.
- Increasing the size of SBA's 504 loan from $2 million to $5 million for standard borrowers (supporting a total project of $12.5 million) and from $4 million to $5.5 million for manufacturers (supporting a total project of $13.75 million).
- Increasing the size of SBA's Microloan from $35,000 to $50,000.
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