Questions Over Plan To Boost Small Business Lending

Wall Street Journal:

WASHINGTON--The Obama administration's latest attempt to jump-start small-business lending is facing headwinds even before it launches.

The U.S. Treasury Department plans to release in coming days the criteria banks must meet to tap a $30 billion lending fund aimed at helping small businesses. The program is expected to include enticement for smaller banks to tap the fund, including an interest rate of as little as 1% and an opportunity for banks that still have Troubled Asset Relief Program funds to substitute new government funds with fewer strings and less stigma.

Read the whole story: Wall Street Journal

Comments

[BusProfitNetwrk]

10:57 PM on 12/09/2010

Banks are doing no good for small business. this is a great summary of how banks are profiting by not lending to small business but instead signing them up for high interest credit cards http://www.youtube.com/watch?v=25--xb-AuiY

[TitusAlliance]

09:05 PM on 12/05/2010

I guess it's no surprise that most are not satisfied with the current administrations policies which hurt business and as in this article lending. Thanks for the post!

[MyrtleJune]

03:04 PM on 12/05/2010

If the banks weren't splitting their interests by both loaning money then at the same betting on those loans to fail, we might see a turn around. Banks need to decide what is best for the community of America, not their greedly little paws. The sad thing is they'd see FAR more payoff by only investing in small business to SUCCEED. But, that's not where their mindset is at. They will continue to fight against Obama and hold this country hostage. Where do I place my bet?

[noob1]

12:22 PM on 12/04/2010

Banks and Insurance Companies need to learn to negotiate and serve small businesses.

[LightShadow62]

01:29 AM on 12/04/2010

Banks are strangling the life out of real small business. I'm not talking about what the GOP calls "small business", the hedge fund managers and multi-million dollar LLCs. I'm talking about the guy with one shop and a few employees just trying to stay alive, I'm talking about people like me.
My clients can't get loans from banks to start projects which means I don't have work. And this problem exists across the globe, because I have proposals out in US, UK and Europe but none of them can get a dime.

An relevant side note: I just attended a trade show where someone came up to me and asked if I knew of any projects that might need funding. I of course said "Yes" but then he qualified his statement by saying he would only touch projects of $10 million or more.
This is the situation in the real world, only the big can get money. The rest of us are out of luck.

[lvdragonlady]

12:36 AM on 12/04/2010

It is time for the government to take over the bigger banks and end this madness.

[sueinmn]

08:01 AM on 12/05/2010

Just the opposite has occurred. The big banks have taken over government.

[Mark Montgomery]

03:40 PM on 12/03/2010

Without even reading the article or knowing what it is about, if banks are fighting it, then it must be a good plan.

[Steve Rockett]

01:08 PM on 12/03/2010

Ah, now there is a fine group of citizens, bankers, whose credibility is beyond question. They have become the weather vane, or should I say vain, of business. If you do exactly the opposite of what they want, the economy grows and tulips bloom in Holland. Boehner will be having a prayer cry in chambers for the poor, poor bankers.

[PHM]

12:04 PM on 12/03/2010

I have a better idea. Save $20B and put $10B into a Small Business Investment Fund.

Don't lend the money. Set it up as a free-standing, not for profit investment fund managed/administered by retired financial/executives for no salary--pay a small monthly stipend to cover expenses only.

Have the FUND invest only in small/new ventures that design/manufacture goods in America. No payback, just return on investment. Share of ownership based on amount of investment. The ROI goes back into the FUND to allow for future investment in new ventures, thus it is self-perpetuating.

By putting a maximum of $1M into each small business we could create enough new jobs to directly employ between 150K to 500K in the first year and support/create another 1M extended jobs in the same time frame.

Money directly into the hands of American workers. Not one red cent should go into any banker's hands ever again.

[CalDemo]

12:33 PM on 12/03/2010

An outstanding idea that would find republicans lining up to fillibuster as it would jeopardize every one of their campaign war chests. This worked for the student loan program, putting the government in direct line for the loans, bypassing the money grubbing bankers that found a way to syphon money from the program.

[PHM]

12:41 PM on 12/03/2010

Perhaps a better option would be to grab the attention of Bill Gates, Warren Buffett, Oprah, and other billionaires that recently spoke of putting large portions of their fortunes into charity...why charity...much more dignity in being able to start a business and provide empoyment. That approach would take it out of the hands of our dysfunctional government and be a slap in the face of the money grubbing Republicans.

[take10]

11:40 AM on 12/03/2010

They claim that small businesses are the key to job creation, and then they try to block every initiative the President puts forth that would enhance opportunities for small businesses to grow and employ more Americans. Does anyone see what's really going on here? "Stop Obama" under any and all circumstances! Senator Mitch McConnell has openly admitted that this is his mission in life for the next two years.

[damnedgentlemen]

11:31 AM on 12/03/2010

I don't know what everyone is so worried about, here comes the Republicans, riding their white horses into Congress to save the small businesses they've been calling themselves the champions of. Nothing to worry about, right? Right?

American Middle Class 1776-2011 R.I.P.

[ThruSpaceAndTime]

11:09 AM on 12/03/2010

"The man who delivered the rant that spurred the epidemic of tea party demonstrations...CNBC's Rick Santelli, whose brash criticism of the White House's mortgage relief plan earned him a bit of notoriety as well as the hearts of a healthy chunk of libertarians, was asked by his colleagues to reflect on how far the message had spread."
http://www.huffingtonpost.com/2009/04/15/santelli-im-proud-of-the_n_187233.html

I wonder what sayeth Santelli concerning this outrage. Might this also be the government's fault as indicated in the WSJ article -- a case of too much or exuberant regulation? Is it ever the bank's fault? On the one hand the small business is America's engine when I want to make a political point. On the other, the big business that eats the small business everyday.......well I only have concern for them (the small business) if the big business can operate with impunity...with total opacity. We want big deregulation followed by government so small it will never be able to regulate us (Big B) or itself in the future. In effect, we (a vested, fractional, slither of an interest, albeit a well-heeled interest) wants to rule. No scrutiny, and a nation nearly sinks through greed unbridled. Some scrutiny applied, and now -- it's too hard. We cannot help the ailing country, within which we have been able to amass large sums of other people's money. It's too hard.

[Pacificus]

10:57 AM on 12/03/2010

I am so TIRED of reading this nonsense. Someone in Congress needs a bill that forces the Fed to loan at 0% to small business directly. No middlemen at the banks. Obviously the TBTF banks can't handle that either. This is truly an amazing and disgusting display from both our Govt. and Wall Street.

[lipps]

12:09 AM on 12/04/2010

Nobody has any credit left after this recession.

[Minion]

03:33 PM on 12/04/2010

Bingo! Totally agree. Force that money out the door!

[Mafdet]

10:56 AM on 12/03/2010

The banks stopped lending to small manufacturers in December of 2007.  In January 2010, President Obama FINALLY announced that he would make $30b available to small business.  It took till July for the legislation to be sorted out.  It took until Sep for it to be passed.  I just assumed that its implementation was automatic but with this article I am surprised to find that par for the course, the Obama Administration, 3 months later, is still fiddling with its implementation, handwringing over how best to do it, scratching heads over how when where if should if we we shouldn't if it's enough or it's not enough it's too much ....
 
How about just put it out there already.  Let's see what happens.  Small manufacturers - the businesses that put Americans to work doing dignified jobs - have been without any funding for growth and employment for 3 years now.  JUST PUT IT OUT THERE AND SEE WHAT HAPPENS.

[blitznstitch]

10:54 AM on 12/03/2010

Hold on a sec - I just saw a Bank of America commericial depicting life in the form of paper pop up books saying how much they are lending to small businesses - you telling me that commericial was a LIE! Oh no..say it ain't so!