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Posts Tagged ‘small business lending’

For small business owners are wondering if the wind of change is always from Washington to you, there is finally some good news. The Senate, in its infinite wisdom, September 14 by a vote of 61-37, a request that the effect of the adoption of the Small Business and Jobs Credit Act of 2010 (also known as the Bill ready for Obama small business) had. Since September 2008, small businesses have disappeared from local banks and even turning his head. There was just no reason. For all purposes, the loan came to a halt. Now there is a chance that the credit machine back shot.

To understand the importance and benefits for small businesses, here is a description of how it works. In summary, the U. S. Treasury loans $ 30000000000 in turn borrowed from the banks of the small business community at rates between 1% and 5%, and the money from an interest in writing for a reasonable profit. Presto – Companies can now realistic applications for loans. Here’s how it works in HR 5297:

1) secure the loan from the Federal Police of the banks. The FBI requires not just hand over money, but reasonable certainty. According to § 103 (b), the bank must be preferred stock (without voting) gives a promissory note or loan as a debt to be repaid at a certain rate.

2) How the Fed is repaid. The Fed and the interests of lenders for a loan or dividends, if the preferred shares. Even better, the government can sell bonds on the secondary market. It’s almost like the FBI to go on lending.

3) pay. Well, at least that’s the idea. This is due to the bad press of TARP I, which was actually a giveaway program without strings. The idea is that the interest and dividends to repay the money advanced by the U. S. Ministry of Finance. We shall see.

4) Bank lending to the plan. According to § 103 (d) (1) (e) Each participating lenders make a “plan of small business loans.” This will describe how it lends money and most importantly, an awareness program, where people know of the loan and how to apply.

5) lender sites. If the lender, web pages (and they all do), they show that program participants and are “trying to small business loans in response to qualified companies.” In other words the inset.

6) Lender quarterly reports. Each lender must issue a quarterly report on the number of loans, so that their credibility can be tracked.

It was long overdue. Hopefully this will open the floodgates of capital for small businesses that are primarily responsible for the conduct of our economy.