White House starts $21 million program to aid small businesses
In March 2009, President Obama vowed to address the drought of bank lending to small companies and announced an initiative to use $15 billion from the federal bailout to unfreeze the markets that finance Small Business Administration loans.
More than a year later, the program was finally launched — as a $21 million effort.
The program is one of several small-business lending initiatives developed by the administration that have struggled to get off the ground. Meanwhile, lending to these companies has fallen. Federal data show that lending to small businesses by community banks declined by about $8 billion, or 2 percent, between September 2008 and September 2009.
Administration officials say helping small businesses get credit remains a top priority. It is a critical component of the strategy to address the nation’s high unemployment. More than half of all U.S. workers are at companies with fewer than 50 employees. Without access to loans, many of these firms are laying off workers or shutting their doors altogether.
Obama’s economic team has put forward several major programs to increase small-business lending.
