On Monday, March 16, 2009, President Barrack Obama promised the nation to help ease the financial plight of the nation’s small businesses, with sustainable action to free-up the stalled credit markets including $15 billion in PARK funds to unfreeze the secondary market for SBA 7a loan guarantees thus freeing up banks to make additional loans. Baltimore’s Diane Bell-McKoy, President and CEO of Associated Black Charities (ABC), was selected to be a front-row guest at the announcement based on ABC’s commitment to supporting the growth of small business through their advocacy, public policy, and innovation strategy.
Ultimately, President Obama’s small business assistance plan brings more confidence to the banking industry to encourage loans to small business borrowers, especially during this recession period. Obama made the announcement just after noon today to reporters after an earlier meeting with Treasury Secretary Tim Geithner, Small Business Administration (SBA) representatives and several representatives from community banks and small businesses themselves.
According to a CNN article, “The president called small businesses ‘one of the biggest drivers of employment that we have’ and said his administration is ‘working diligently to increase liquidity throughout the financial system’.” http://www.cnn.com/2009/POLITICS/03/16/obama.small.business/index.html?iref=topnews
The President went on to caution that this is a part of a multiple step strategy towards what he predicts will be a long-term credit bolstering effort.
According to McKoy, the plan’s outline fits well with ABC’s More in the Middle initiative, which includes a focus on the employment growth found in small businesses as they grow and expand, especially African American businesses. As these businesses grow their employee base, often they make these opportunities available to work-ready low skill and low income workers. These same business owners also make significant civic contributions to the communities in which they reside. Their growth thus provides another way to attack the significant wealth gap among African Americans in the region and throughout the country. ”The Associated Black Charities’ More in the Middle initiative is all about closing the wealth gap and how critical small businesses are in growing the economy. Any type of targeted assistance to small businesses in addition to the President’s workforce resources in the stimulus bill will go a long way in marrying opportunity between small businesses and low-skill citizens – each group significantly contributing to the economy and creating a greater path for sustainable assets,” said McKoy. “This is one of the core elements of More in the Middle, and we need to continue to look for other state and federal policy options that will lend themselves to making these kind of opportunity marriages.”
Part of today’s announcement entailed a program to benefit small businesses and community banks by revitalizing the SBA’s frozen 7(a) loan program – its flagship initiative to guarantee loans to small businesses. This is a critical piece of the Financial Stability Plan and includes:
