WASHINGTON - Sen. John Kerry, Chairman of the Senate Committee on Small Business and Entrepreneurship, Ranking Member Sen. Olympia Snowe and Sen. Charles Schumer, a senior member of the Senate Committee on Banking, sent a letter to Treasury Secretary Henry Paulson today urging him to use a portion of the rescue package to purchase government-backed small business loans through the Troubled Assets Relief Program (TARP). This would provide immediate relief to small businesses shut out of the credit market because of a paralyzed system.
The TARP helped to save the economy from complete collapse, but the effects of that rescue have yet to reach small businesses. The government-backed small business loan programs are frozen. Through TARP, the Department of Treasury has the existing authority to address this liquidity crisis and its affects on small firms. Purchasing pooled government loans would jumpstart SBA lending and free up liquidity for the hundreds of thousands of American small businesses that need loans to stock their shelves, pay their employees and keep their businesses running.
“Small firms are drowning without access to capital,” said Sen. Kerry. “We’re running out of time in the greatest financial mess since the Great Depression. I hope that Secretary Paulson will use his authority to jumpstart small business lending. Countless jobs are at stake.”
“It is absolutely imperative that the Treasury Secretary immediately take steps to purchase troubled SBA loans to free credit markets and once again create liquidity for small businesses,” said Sen. Snowe. “To dispel any doubt that the Secretary has the authority to undertake such action, I have introduced the 10 Steps for a Main Street Economic Recovery Act which, among other things, reiterates the Treasury’s authority to purchase SBA backed securities in the secondary market. To that end, I hope the Treasury will act expeditiously to jumpstart SBA lending and provide our nation’s small businesses with the access to loans that is so necessary to drive economic growth and job creation.”
“The administration has the ability to immediately provide a lifeline to small businesses that are squeezed by the credit crisis. Congress didn't provide this authority so it would go unused, not while our bread-and-butter businesses are being forced to scale back jobs in these worsening economic times. Relief needs to come right away,” said Sen. Schumer.
Click here to read the letter sent to Secretary Paulson.