Obama to Roll Out Small-Business Lending Program
February 2, 2010 Leave a comment
WASHINGTON—President Barack Obama will roll out a proposed $30 billion small-business lending program Tuesday, the next in a series of administration efforts to jump-start hiring by the nation’s small businesses.
The program, which Mr. Obama will detail at an appearance in Nashua, N.H., Tuesday, would invest $30 billion from the government’s Troubled Asset Relief Program in community banks to encourage them to lend to small businesses. If approved by Congress, the program would incentivize small and midsize banks to provide loans valued at several times that figure.
“Small businesses … have created roughly 65% of all new jobs over the past decade and a half. And I think we should make it easier for them,” Mr. Obama will say in unveiling the proposal, according to an advance copy of his remarks.
In a briefing Monday, senior administration officials who helped draw up the proposal say that under the program, Treasury would provides capital investments in a swath of the nation’s 8,000 banks with assets under $10 billion, which do more than half of U.S. small-business lending.
Banks that increase lending to small businesses beyond 2009 levels would qualify for reduced dividends owed to Treasury on the capital investment. White House economists hope that feature will spur interest in the program among community banks that shunned the original TARP program because of restrictions on the capital and worries that they would be tarred by their competitors as “troubled.”
The program is part of a package of incentives Mr. Obama has spoken about since his campaign, and discussed during his State of the Union address last week. Last week, he announced a $33 billion program to provide up to $500,000 in tax credits for businesses that add jobs or increase wages beyond the rate of inflation this year. In the 2011 budget blueprint released Monday, the administration also proposes to eliminate all capital gains taxes on small-business investment and raise the limit on Small Business Administration loans from $2 million to $5 million.
The small-business lending program, like the other components in the White House jobs plan, must be approved by Congress, which takes up work on a jobs bill this week.
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