Small Business Finance News
Obama Pledges Increased Limits On Small Business Loans
Written by Jenna Weiner
Small businesses can get loans up to $5 million.
President Obama on Wednesday addressed growing concerns that the economic recovery is not reaching small businesses, pledging to raise a cap on loans for small businesses.
Part of the plan involves increasing the size of loan limits form the Small Business Administration from a maximum of $2 million to $5 million. The administration is also looking to redirect funds from the Troubled Asset Relief Program (TARP) to help small businesses.
Many community banks have put the brakes on lending because of increasing loan-losses, but additional funds to these banks should be good news for small business owners who need additional financing for expansion and to remain competitive.
However, economists said that federal rules attached to TARP funding could pose difficulties for small banks and incentives will be needed to get small business lending going again.
Senator Mary Landrieu of Louisiana, who chairs the committee on small business and entrepreneurship, has introduced a bill to increase loan limits and remove barriers to loans.
"Coupled with lower-cost capital available to community lenders, these higher loan limits will spur small business growth and aid in our nation's continued economic recovery," Landrieu said.
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