President Obama: Treasury Department will spend up to $15 billion to boost lending to small businesses - summary/full details
The financial crisis has dried up most commercial lending in the country, including the lines of credit which are the life blood of the small businesses that historically have created about 70% of the economy's new jobs. Under the new program, the Treasury Department would directly purchase up to $15 billion in securities composed of loans backed by the Small Business Administration. Loans made after July 1, 2008 would be eligible, officials said. The funding would come from the $240 billion in bailout funds already approved by Congress as part of the Troubled Asset Purchase Program or TARP.
In addition to buying securities, the administration is proceeding with plans to eliminate fees for borrowers and lower fees for lenders on its two signature small business lending programs and increasing the level of guarantees provided by the government.
Additionally, the IRS issued information Monday on a new tax provision, passed in the government's stimulus bill last month, that would allow businesses to credit losses in 2008 against taxes paid for the previous five years--an increase from the standard "carry-back" of two years.
Details of the administration's small business programs can be found at http://www.sba.gov/recovery/index.html.