The Stimulus Flies Into Main Street

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Business plans for SBA loans

A lot is already being accomplished with the stimulus package.

For example, the Obama administration has already begun injecting billions of dollars into the economy from its $787 billion fiscal stimulus plan, through grants to state education and crime-fighting programs, Medicaid efforts, and transportation projects. Most workers will see small increases in take-home pay in their first April paychecks when withholding allowances are adjusted to reflect the Making Work Pay tax cut. The president's housing plan funnels $275 billion to U.S.-owned mortgage giants Fannie Mae and Freddie Mac to assist in lowering the interest rates of struggling homeowners while enticing loan servicers to restructure still more mortgages.

But the hundreds of billions of dollars being sent to such business behemoths as Citigroup Inc., General Motors Corp. and American International Group Inc. have rankled many voters who have failed to see an equivalent concern for small-business and Main Street suffering.

The Wall Street Journal announced today that the Obama administration is poised to pour billions of dollars into Main Streets across the country to boost the energy and viability of smaller businesses.

We already know about the $730 million from the stimulus plan that went to the Small Business Administration to reduce small-business fees and guarantee a greater share of some SBA loans. The Obama budget would authorize the SBA to support $28 billion in lending guarantees.

In what appears to be an expansion of those efforts, Mr. Geithner said yesterday that the Obama administration will launch a plan next week that will provide financing, liquidity and guarantees to open up small-business lending, which is seen as a crucial element of economic recovery.

The size of the program is unclear, but it will come in addition to the Term Asset-Backed Securities Loan Facility, or TALF, which government officials hope will generate up to $1 trillion of lending for businesses and households.

Mr. Geithner's Monday briefing followed his Feb. 10 announcement that the administration was working on a "small-business and community-bank lending initiative" that would have several components. It would finance the purchase of highly rated Small Business Administration loans, increase the government guarantee for SBA loans, and reduce the fees on certain SBA loans, among other things.

The small-business lending plan is part of a concerted effort by the Obama administration to ensure that the new government programs aid Main Street as well as Wall Street, a Treasury official said.

With the entire economy so dependent on the viability of our small businesses, this assistance comes none too soon. There are literally hundreds of thousands of small businesses that deserve assistance very bit as much as BigCo, and now they have a chance of getting it. Hallelujah!