Small Business and Community Lending Initiative
The Obama Administration firmly believes that economic recovery will be driven in large part by America’s small businesses, which have generated about 70 percent of net new jobs annually over the past decade. But across the country, tens of thousands of small business owners are finding it harder to get the credit necessary to stay in business.
Treasury is taking immediate action to ensure that credit – the lifeblood of America’s small business and its economy – gets flowing again to entrepreneurs and business owners. As another part of the Consumer and Business Lending Initiative, the Treasury Department will begin making direct purchases of securities backed by SBA loans to get the credit market moving again, and it will stand ready to purchase new securities to ensure that community banks and credit unions feel confident in extending new loans to local businesses. These purchases, combined with higher loan guarantees and reduced fees, will help provide lenders with the confidence that they need to extend credit, knowing they both have a backstop against their risk and a source of liquidity. These measures will complement other steps the Administration is taking to help small businesses recover and grow, including several tax cuts under the Recovery Act.
Unlocking Credit for Small Businesses
- Jumpstart Credit markets for Small Businesses by Purchasing Up to $15 Billion in Securities
- Stand Ready to Purchase Securities Pooled from the SBA’s Largest Loan Program for Small Businesses
- Stand Ready to Purchase Securities from the SBA’s Community Development Loan Program
- Temporarily Raise Guarantees to Up to 90 Percent in SBA’s 7(a) Loan Program
- Temporarily Eliminate Certain SBA Loan Fees to Reduce the Cost of Capital
- Call by Secretary Geithner for New Reporting Requirements on Bank Lending to Small Businesses and Greater Efforts to Extend Small Business Loans
- Issue Guidance for an Expanded Carryback Provision as Part of the Recovery Act’s Comprehensive Tax Cut Package for Small Businesses
