Obama's Small Business Loans - Rescue Plan For Small Businesses - Part 1Posted by Smidt Chapman on June 3rd, 2021 How does the Obama administration really feel about small businesses? This can be a good question, especially considering that the recent State with the Union address mentioned "smaller businesses" fourteen times. Is it lip service or perhaps the genuine thing? Better yet, creates this change mean small enterprises will in the end begin receiving loans or credit lines? Since talk is proverbially cheap in Washington, let's consider Obama's actual initiative in detail to answer this question. As you have probably heard, up to billion of TARP monies who have ended up repaid through the big banks is employed to invest in this system. It is not "live" yet--it must be enacted into law by Congress and must pass muster through its various subcommittees. Here is a review of its major provisions: 1. It is really a separate program distinct from TARP. TRANSLATION: This is an attempt to distance it in the bad press of the TARP program. 2. Money will likely be dedicated to community banks having assets under 10 billion. Banks with assets below 1 billion will likely be able to loan around 5% with their risk weighted assets. Banks with assets between 1 and 10 billion are able to use approximately 3%. There are approximately 8,000 community banks. find more : the important boys like Bank of America, Wells Farg 3. Loan guarantees using the SBA will continue to be at 90%. The SBA doesn't make loans unless you are inside a disaster zone (FEMA Loans). They be sure that the losses suffered by private banks to produce these refinancing options, which experts claim gives those banks more incentive to lend. TRANSLATION: We want our local business bankers to feel warm and fuzzy once they result in the loan. And hopefully blog of them. 4. Eliminating SBA guarantee fees. When you get an SBA loan you need to pay a fee at closing which goes to Washington so helping defray losses from the banks. It can be expensive, particularly for larger loans. TRANSLATION: Aren't all of us tired of paying excessive closing costs and costs? 5. Big banks, don't bother applying. It doesn't require a NASA rocket scientist to find out most in the lending is performed by small community banks. Only they can participate. great post to read : Although community banks make-up only 20% of bank assets, they account for over 50% of most small company loans. Fortunately there is really a loan program out there and SBA lenders are in reality making loans currently: the Community Express Loan Program. This gives unsecured small enterprise loans between ,000 and ,000 with very little paperwork, answers typically in two days, interest rates presently at 7.75%, funding and two weeks, and monies wired right to your organization account. And, there are lenders doing the program currently. The point: why wait for the trickle down effect to occur next year when you can head to banks at this time who are in reality doing the city express program?Like it? Share it! More by this author |