Banks Offer Small Businesses Loans Promised By Barack Obama Administration
Banks are offering small businesses loans promised by the Barack Obama administration, but the response is not as expected. Although small businesses loans of USD 30 billion have been set aside by Barack Obama in September 2010 on signing the Small Business Jobs Act only small businesses loans amounting to USD 11.6 billion are being requested by participating banks. This is because of two reasons:
1. Targeted smaller community banks are showing lesser interest in the program, because several of them are already well capitalized.
2. The program requires repayment of the loan to be made at varying rates of interests, making the proposal less palatable to banks.
Addressing the House Small Business Committee, last week, Treasury Secretary Timothy Geithner said that the slow pace of provide the capital to those needing financial assistance was due to built-in safeguards requiring each small businesses loans application to come under review of the bank's primary supervisor and the Treasury Department.