Small banks may decline billions from Obama

Obama touts federal help for small businesses

by Darlene Superville
The DC Caller
2/2/2010

WASHINGTON (AP) — …As part of a bid to sell his economic agenda and re-energize voters, Obama is traveling to politically significant New Hampshire on Tuesday to draw attention to a proposal he mentioned in his State of the Union address last week.

The president wants to funnel $30 billion to local banks so that they can help small businesses get the financing they need…

…“Jobs will be our No. 1 focus in 2010,” Obama said in excerpts of his prepared remarks, which the White House released early. “And we’re going to start where most new jobs do—with small businesses. These are companies that begin in basements and garages when an entrepreneur takes a chance on his dream, or a worker decides it’s time she became her own boss.”

The $30 billion in loan financing would come from money repaid by big banks that got help from the $700 billion Troubled Asset Relief Program, the vastly unpopular bailout for those on Wall Street whose actions led to the economic downturn.

That $30 billion would be used to create the Small Business Lending Fund, separate and distinct from TARP, according to two senior administration officials who outlined the program on condition of anonymity before Obama’s announcement…

…White House officials said the new fund will bolster banks’ balance sheets and enable them to make more loans to small businesses.

But many in the banking industry say lending is not hampered by a lack of capital. Even well-capitalized banks are having trouble finding creditworthy borrowers. Small businesses also are reluctant to borrow money in a sluggish economy for expansion or improvements…

Read the complete article at the DailyCaller.com

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