The other day we learned of renewed efforts promised by the Obama Administration to stimulate small business.
This week, they announced some plans to sweeten guaranteed loan programs. The administration is allowing a few weeks for comments before finalizing these details.
- The SBA will raise loan limits from $2m to $5M
- Local banks can get 3% interest rates in they demonstrate how they’ll use TARP funds for small business, a reduction from the 5% big banks usually pay.
There is not a lot enthusiasm for this program among banks, however, as many of them report that the paperwork is overwhelming and that few small businesses are seeking loans. Some banks are also concerned about the “strings attached” and don’t want to be tainted by any hint of federal bailout money.