Obama sends small business lending bill to Congress

Obama sends small business lending bill to Congress

Saturday, May 08,2010 04:36 AM

The Obama administration has sent Congress a proposal to create a $30 billion program to unfreeze credit for the nation's small businesses.

The $30 billion fund would provide support to small and medium-size banks with assets less than $10 billion to encourage them to increase lending to small businesses.

Obama outlined the effort in his State of the Union address in January. Initially the administration planned to obtain the money by tapping leftover funds in the financial bailout program. Officials said Friday that the effort now has no links to the unpopular Troubled Assets Relief Program.

In remarks to reporters at the White House, Obama said the program has been expanded to include a new state small business credit that would support efforts by state governments to provide loans to small businesses.

"This state initiative, which was designed with the help of governors and members of both the House and the Senate, will help expand lending for small businesses and manufacturers at a time when budget shortfalls are leading states to cut back on vitally important lending programs," Obama said.

An administration official said many states have their own programs to support loans to small businesses but these programs have faced cuts because of severe budget shortfalls.

This official, who spoke on condition of anonymity because he was not authorized to speak publicly, said the administration expects that Rep. Nydia M. Velazquez, head of the House Small Business Committee, and Sen. Mary Landrieu, head of the Senate Small Business Committee, would add their own proposals to the legislation as it moves through Congress.

Read the rest here: http://www.usatoday.com/money/smallbusiness/2010-05-07-small-business-lending-bill_N.htm