Businesses laud Obama plan
Published 11:59 pm Tuesday, March 17, 2009
Local business owners were pleased to hear the news of President Barack Obama’s plan to help small businesses.
Monday, Obama announced a plan that would get banks to increase lending to small businesses by buying up existing loans, freeing those banks to again lend to struggling businesses.
“I know that this area definitely seems to be comprised of many small business owners,” said Debra Donaldson with Coldwell Banker First Choice Realty. “If it helps the banks loosen up money (to businesses), then it’s going to help us all grow.”
Obama said Monday he wants the large banks who received federal bailout funds to make more loans to small businesses. In order to make that happen, the federal government will spend up to $15 billion to purchase the small-business loans that are currently clogging the books of community banks and other lenders, enabling them to start loaning money again.
Funds from the $700 billion Troubled Assets Relief Program will pay for the program.
“I’m glad that somebody is thinking about the small people,” said June Simpson, co-owner of Harold’s Discount Furniture. “That’s really what keeps the economy going, are the mom and pop stores in small towns like ours.
“I know the government has already done a lot to help the big banks, but the little people are just as important as the big people.”
In addition, the Internal Revenue Service announced Monday that small businesses will be able to carry back business losses for five years, instead of the previous two-year limit. An IRS spokesman said this would enable businesses to “increase (their) cash flow as we come out of this period and allow (them) to invest more in (their) operations.”
U.S. Treasury Secretary Timothy Geithner said the nation’s top 21 banks in the TARP program will be required to report on a monthly basis how much they are lending to small businesses. The banks that received the most funds from TARP include Citigroup ($50 billion) and Bank of America ($45 billion).
San Francisco-based Wells Fargo & Co., which owns Wachovia Bank, received $25 billion from TARP.