Obama's Small Business Loans - Rescue Plan For Small Businesses - Part 1Posted by Murray Ryan on April 28th, 2021 How does the Obama administration experience about small enterprises? This is really a good question, especially since the recent State with the Union address mentioned "small business owners" fourteen times. Is it lip service or the real guy? Better yet, does this mean small businesses will ultimately begin receiving loans or lines of credit? Since talk is proverbially cheap in Washington, here are Obama's actual initiative at length to answer this question. As you have probably heard, around billion of TARP monies which have also been repaid with the big banks is utilized to invest in the program. commercial loans melbourne is not "live" yet--it should be enacted into law by Congress and must pass muster through its various subcommittees. Here is really a summary of its major provisions: 1. It can be a separate program distinct from TARP. TRANSLATION: This is an try to distance it in the bad press from the TARP program. 2. Money is going to be committed to community banks having assets lower than 10 billion. Banks with assets lower than 1 billion will likely be able to loan as much as 5% of the risk weighted assets. Banks with assets between 1 and 10 billion may use up to 3%. There are approximately 8,000 community banks. TRANSLATION: the important boys like Bank of America, Wells Farg 3. Loan guarantees with all the SBA will stay at 90%. The SBA doesn't make loans unless you are in a very disaster zone (FEMA Loans). They ensure that the losses suffered by private banks in making these loans, which often gives those banks more incentive to lend. TRANSLATION: We want our local small company bankers to feel warm and fuzzy after they make the loan. And hopefully a lot of them. 4. Eliminating SBA guarantee fees. When you get an SBA loan you make payment for a fee at closing which works to Washington and helps defray losses through the banks. It can be expensive, specifically larger loans. TRANSLATION: Aren't we all tired of paying excessive high closing costs and fees? 5. Big banks, think before applying. It doesn't require a NASA rocket scientist to learn most of the lending is performed by small community banks. Only they could participate. TRANSLATION: Although community banks make up only 20% coming from all bank assets, they take into account over 50% of small enterprise loans. Fortunately there is a loan program available and SBA lenders are actually making loans currently: the Community Express Loan Program. i thought about this gives unsecured small company loans between ,000 and ,000 with almost no paperwork, answers typically in two days, rates presently at 7.75%, funding and two weeks, and monies wired right to your business account. And, you will find lenders taking part in this program currently. The point: why wait for trickle down effect to occur next year when you'll be able to visit banks at this time who are in fact playing the neighborhood express program?Like it? Share it! More by this author |