Obama: $15B for Small Businesses

On Monday, President Obama announced that the U.S. Treasury would buy as much as $15 billion Small Business Administration (SBA) loans in order to further boost the secondary markets for small business loans.

The fiscal move by the Treasury should increase the SBA's lending ability to banks and then ultimately to small businesses by further enabling those bank lenders to free up capital in order to make new small business loans.

Small businesses are "not only job generators, but the heart of the American dream," the President said. "Too many entrepreneurs can’t access the business capital they need to start or grow their businesses." The new policy aims to change that quickly.

Cynthia Blankenship of the Bank of the West in Grapevine, Texas said, "This is an incredible tool for community banks nationwide to help jump start the economy."

Congressional leaders also hailed the move.

Obama's "efforts send a clear message to entrepreneurs around the country: You are central to our economic recovery strategy. The ability to secure a loan at affordable terms often makes the difference between whether a small firm stays afloat, grows and create jobs, or shuts it doors," said Rep. Nydia Velazquez, who is the chair of the House Small Business Committee.

The SBA's "Certified Lenders Program (CLP)" is designed to provide quick service on loan applications received from participating lenders who have a successful SBA lending record and a thorough understanding of SBA policies and procedures. Participating lenders will be enabled immediately via the new Obama funding initiative.

For small businesses across the country this is outstanding news. For those experiencing a downturn in their business, this could be just the boost required to grow into the recovery that is likely later in the year.

Many very successful entrepreneurs know that strong firms retool their businesses during lulls in business cycles. Barry Cox, Owner of SkyRun Vacation Rentals in Keystone Colorado observes, "Several well known firms were born during recessionary times. We see it as an opportunity to borrow, invest, and grow the SkyRun business model. What better time for SkyRun to add properties and new franchised vacation locations? When the market for vacation travel returns, as it will eventually, we will be much better equipped to take advantage of the demand."