WASHINGTON – After repeated efforts by 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, to raise awareness of the problems facing small firms, the Department of Treasury’s announcement today signals acknowledgement from the administration that federal help is needed.
In several letters to the administration, Sens. Kerry, Snowe and Schumer urged more aid for entrepreneurs, including most recently a letter to Treasury Secretary Henry Paulson last week pushing for a portion of the rescue package to be used to purchase government-backed small business loans through the Troubled Assets Relief Program (TARP). In their actions made today, Treasury said they would infuse $20 billion into the secondary market through loans to asset managers. This is a middle-of-the-road approach that will help to inject some liquidity into the market and should make it easier for entrepreneurs to gain access to credit as they look to stock up on holiday supplies and services.
“The frozen lending market has left small businesses in the cold as we face the holiday rush,” said Sen. Kerry. “I'm glad the Secretary has taken our warnings seriously and taken this step forward. It should provide some needed relief at a critical time. We hope small businesses will continue to get the help they deserve as further steps are taken to repair our ailing economy. ”
“I applaud Treasury Secretary Paulson for announcing this morning that the government will create a lending facility that the 7(a) industry can access in order to create liquidity once again for small business borrowers,” said Sen. Snowe. “This is a crucial first step to jumpstarting SBA lending and helping our nation’s small businesses access the capital they need to drive economic growth and job creation. All that said, more must be done so I continue to call on Treasury to expand its action and also purchase SBA 504 loans just as I have proposed in the 10 Steps for a Main Street Economic Recovery Act that I introduced last week.”
“The arteries of the financial system are still clogged and as a result, too much of the economic activity on Main Street is slowing to a crawl,” said Sen. Schumer. “This new focus by Treasury and the Fed should help inject some much-needed economic life into Main Street and couldn’t come a day sooner.”