With all of the on-going action about rescuing homeowners from foreclosure and rescuing banks from “toxic” assets, little has been heard about the needs of businesses who are being strangled by the unavailability of credit. Today, President Obama came to the rescue.  As reported in the Chicago Tribune, Obama hopes to get credit flowing again to Main Street, not just Wall Street, by authorizing the government to spend up to $15 billion to buy the small-business loans that are now choking community banks and lenders. That, in turn, could allow those banks to start lending money again to small companies to invest, pay bills and stay afloat. Small businesses have created about 70 percent of the new jobs over the past decade, and as their credit lines have dried up, so has their ability to thrive or survive.

Normally, primary bank lenders can issue loans to small businesses and then sell those loans to what’s known as a secondary market of bigger bankers. The sales allow the community lenders to make even more loans and keep the credit cycle going. But that isn’t happening. Skittish investors have been staying away.
So under Obama’s plan, the government will start buying up many of the loans directly, with terms to be worked out as soon as the end of the month. The $15 billion will come from a bailout plan already approved by Congress to rescue the financial sector. Obama aides say the plan will offer fast, direct help.

There was also a political component to all the attention the president gave to small businesses. The White House is aware of the nation’s bailout fatigue; hundreds of billions of taxpayer dollars have gone to prop up financial giants who made poor decisions, while many others who have done no wrong have paid the price.
Pres. Obama made clear to show he was on the side of everyday entrepreneurs. He said small businesses “are the heart of the American economy” and “the heart of the American dream” and the core of “America’s story.”