Obama Takes First Steps to Help Entrepreneurs

Posted by Biz Central USA Marketing Team on March 19, 2009 under Small Biz News | Be the First to Comment

In efforts to jumpstart the Recovery Act in ways of small businesses, President Obama and Treasury Secretary, Timothy Geithner, announced Monday that the Government will increase lending guarantees administered by the Small Business Administration and plans to spend $15 billion to bolster the secondary market.

Currently the SBA guarantees payment on 85 percent of a loan up to $150,000 and as much as 75 percent on loans of more than $150,000. The plan will increase this to 90 percent across the board. The increase reduces lender risks as an incentive to make loans. In addition, the plan also waives fees up to $75,000, which borrowers usually pay for the loans.

“Small businesses are at the heart of the American economy,” Obama said Monday. “This is going to be a first step” to help entrepreneurs.

Under the plan, the administration will also require the 21 largest banks getting government bailout money to provide monthly reports on how much they are lending to small businesses, and all other banks must make quarterly reports on such lending.

Treasury Secretary, Timothy Geithner, pushed forward to urge banks “to go the extra mile” to offer loans, stating “they bear a “social responsibility” to assist in the recovery because of their role in the financial crisis.”

As a small business owner, what are your thoughts on these first steps to recovery? How will an increase in loan guarantees assist you as an entrepreneur?