US Treasury to Issue Loans to Lift Up Small Firms
On Friday, the U. S. Treasury said that a $30 billion loan fund might help pull the small banks out from the economic crisis, which is hindering their growth plans.
Earlier this month, President Barack Obama had suggested a small business loan program that would use $30 billion in Troubled Asset Relief Program (TARP) funds repaid by larger banks and direct it to a new program, which would require congress approval.
Assistant Treasury Secretary for financial stability, Herbert Allison said, “The proposed design of this new program would provide a clear economic incentive for smaller banks to increase small business lending”.
Small business owners and advocates told the panel that they have experienced a three-year drought in lending and asked lawmakers to simply bypass the banks and turn the Small Business Administration into a direct lender of government funds. At present, the SBA provides guarantees for up to 90% of loans made by banks through its programs.
According to SBA Administrator, Karen Mills, the fastest way to increase lending was not by creating a direct loan mechanism, but by channeling money to banks while easing restrictions on some of the SBA’s most popular loan restrictions.
Federal Reserve Governor, Elizabeth Duke expressed optimism for an increase in lending this year, even though credit remains abnormally tight.
Related posts:
- Treasury Report Shows Drop In Small-Business Loans
- SBA loan activity increases in 2010
- Obama’s small bank loan proposal intrigues local bankers
- Loans by top TARP banks fall in Jan – US Treasury
- Arizona small-business loans down
Tags: Loans