President Obama Announces New Small Business Lending Initiatives
Conference Call at 10:45am to Discuss Plan
WASHINGTON, DC- President Barack Obama will visit a small business in Maryland this afternoon where he will announce new lending initiatives to shore up lending for America’s small businesses. Since the financial crisis began, small businesses have faced a perfect storm: the pulling back of lending by banks, deterioration in the value of real estate that they often rely on for collateral and weakened sales. The Obama Administration is committed to using all of our available tools to help small businesses access capital, create jobs and support a durable economic recovery.
The Administration has already taken several important steps to get credit flowing again to small businesses and to encourage job growth and these efforts have helped produce results. Compared to the depths of the recession, average weekly SBA loan volume is up over 70% and SBA secondary markets have returned closer to historical levels. In total SBA funding has supported nearly $13 billion of lending since ARRA was enacted on February 17, 2009.
But there is still a long way to go. That is why the President is announcing new measures today as part of an ongoing effort to help small businesses access credit and create jobs.
“Small Businesses have always formed the backbone of the American economy. These entrepreneurial pioneers embody the spirit of possibility, the tireless work ethic, and the simple hope for something better that lies at the heart of the American ideal,” said President Barack Obama. “The problem is, our small businesses have been some of the hardest hit by this recession. There’s no question that the steps we’ve taken have improved the overall climate for small businesses across the country, but there is more we need to do. And that’s why today, we’re announcing new steps to support more lending to America’s small businesses—steps that will lead to more jobs, more growth, and a stronger economic recovery.”
“America will not recover until our small businesses recover. In communities across the country, they are the engines of job growth and lead the way to the industries of the future. While we have made progress stabilizing the financial system, we need to do more to help small businesses get the credit they need to grow and hire. The President’s announcement today has a simple goal: help small businesses by helping the community banks whose business it is to serve them," said Treasury Secretary Tim Geithner.
“America’s 29 million small businesses have been hard hit in this recession. Nine months ago, President Obama sent small businesses a life line: the American Recovery and Reinvestment Act. Since then, the SBA has supported more than 33,000 loans for a total of almost $13 billion in small business lending. This has helped save or create tens of thousands of jobs,”said Small Business Administrator Karen Mills. “But there is much more work to be done, which is why President Obama today pledged his support for legislation that would increase the maximum size of some SBA loans. Increasing maximum loan sizes will allow the SBA to ensure that more small business owners and entrepreneurs can get access to the credit they need to expand their operations and create jobs.”
A fact sheet on the President’s Small Business Lending Initiatives can be viewed here: http://www.whitehouse.gov/assets/documents/small_business_final.pdf
The President’s Announcement will include the following:
1. The Administration will take steps to improve access to credit for small businesses by supporting lending by small banks and Community Development Financial Institutions (CDFIs) through the Financial Stability Plan. This new initiative will support small business lending by providing lower-cost capital to small banks that present small business lending plans and to CDFIs that lend to small businesses in the hardest-hit rural and urban areas.
2. To get small businesses more access to the credit they need to grow and thrive, the Administration will seek legislation to increase the maximum size of three types of Small Business Administration loans. Increasing the maximum loan size of 7(a) loans from $2 million to $5 million will help small businesses invest in machinery, equipment, land, and buildings. Increasing the maximum loan size of 504 loans up to $5.5 million will help small businesses grow and expand their payrolls by supporting real estate purchases. And increasing the maximum loan size of SBA microloans from $35,000 to $50,000 will give a boost to start-ups and other smaller businesses.
3. The President will call on Treasury Secretary Geithner and SBA Administrator Karen Mills to convene a conference of regulators, Congressional leaders, and small-business owners to establish further steps the government can take to help small businesses access the credit that is so vital to their growth, and to economic prosperity in this country.