Bailout Money Heading To Small Businesses
Small businesses finally are getting their own little piece of the federal government’s ballooning bailout package.
U.S. officials announced the federal government as part of a broader package will lend up to $200 billion to institutions that originate consumer loans and business loans backed by the Small Business Administration.
The rationale, Secretary Paulson said in a news conference, is it will create liquidity, spurring banks to lend again to consumers and businesses. Some hope it could especially help banks that specialize in offering SBA-backed loans, since such lending has dried up in recent weeks.
Nobody, of course, really knows at this point whether such a cash infusion into the lending system will actually save many struggling small businesses. But some are optimistic it will help – and feel it at least shows policy makers recognize the dire situation on Main Street and want a more direct solution.
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