Federal Government considers TARP money for small business

The Washington Post reported that the federal government is considering making some of the $700 billion in the Troubled Asset Recovery Program (TARP) available to small businesses around the country.  There aren’t any details behind what is being proposed, but, according to the article, the Treasury Department seems to be in favor of the idea while the National Economic Council seems skeptical.

The article discusses the fact that some in government feel that small business America will be the sector to help spur the economy out of this recession.  Some economists estimate that small businesses employ 60-80% of the workforce and if the small business community can access funding for growth and employment, the economy will get back on track.

There’s been some question on the effectiveness of the initial stimulus package and the potential for a second stimulus bill.  It isn’t clear whether this use of the TARP funds is a way to avoid another stimulus bill. It sure seems to make sense if the funds are there and this will get the banks lending at a faster pace so small businesses can access credit to stay afloat or even expand.

Be sure to watch as this story continues to develop over the coming weeks.

Do you feel small business lending is a proper use of the TARP funds? If you work for a small business or have small business clients, what’s the greatest need to help you grow and increase employment right now? Post a comment.

– Mark Koziel

Comments

Our group, a collection of small businesses, is off 42% in cash flow and 76% in profits. We are a search firm. Besides providing 4000+ direct jobs, we find 60,000+ jobs for others in most years. We are not laying off, we are hanging in there , keeping people at full eanings even when they produce nothing. I want no TARP money or any other loans, since I can get by without it; I say this for my brethren, many of whom have not saved from the "7 good years."

Unfortunately, any stimulus coming from the White House or Congress has only one single goal - get votes, and favor Democratic supporters. The stimulus to small business smells a whole lot like the mortgage fiasco we are trying to bailout now. The best help to the economy is to help qualified personnel find jobs in secure industry, not upstarts. The first step would be to enforce and strengthen job discrimination prevention with a zero tolerance. Employers must absolutely be prevented from screening out a canidate without interview and solid justification - valid recourse for not hiring is to refer or consider for an other similar position. For example if a person is not a bean counter, may be they could count apples. To cull a candidate would incur stiff civil penalties against all parties involved. If there is a stimulus, try a few bucks toward job fulfillment and job search.

I believe that the success of small business is the success of the American economy. I do not, however, trust that the current adm will do what's best for both. I am suspicious of how any TARP $$ will be used & what the price to small business that $$ might be. Will it be in the form of a loan with strings-like the bank "loans"? Will the trade off be government ownership in small business as in the auto industry?
If that's the form of the "so called help" - I say keep your $$.
If, however, the help is in the form of tax cuts that will allow small business to actually keep the dollars saved to invest in their business & employees, I will favor that kind of help. Gov't has sucessfully gotten their grubby hands on big business in a very permanent way. We must fight to keep the grubby ownership hands off small business. I'd rather go down than give up.

Smart small businesses will not accept government money...too many strings, too much interference, and ultimately, too expensive.

The TARP funds were specificallyt designed to serve the purpose of stablizing the financial system and provide lenders with liqiudity in place of toxic assets which lost their market. It seems to have worked. In my view this was an insurance policy provided by the federal governments good(?)credit.
Now the insurance should be repaid and the bonds which provided the liquidity should be retired. Though government accounting is difficult to understand, if the TARP funding added to the national debt wouldn't repayment assist in reducing inflation and the deficit currently at record levels? Wouldn't retirement of the debt provide liquidity back to the private sector and make cash available to buy (for example) CIT bonds rather than additional government bail-out?
Good fiscal management says retire the TARP bonds and get the money back into the private sector.

Any help and support from government side will be great. Small businesses have the potency, they just need a bit protection. Thank you.

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Sara

http://smallbusinessgrant.info

If you add stix to burning fire its just going to get bigger. The only way you can fix this is to bring work back to the U.S.A, American's have reached an all time form of "GREED" And has pushed to using outside labor. I feel that you can not use money for this problem and that its realy simple to fix,Its called up frount priceing and you have a cap on it. If you cap spending like automotive,medical,and health care, fuel and so forth it will give the consumer a chance to budget and maintain a healthy life style. Plus i will add that for us to see this we need to limit congress and staff to only "five" year term so that fresh Idea's can be made.Take out the Greed and give everyone a chance for a healthy lifestyle. thanks RJ Williams

I heard much about the Troubled Asset Recovery Program (http://rapid4me.com rapidshare) and I think that it's of great importance for small business because today it's the sphere of business that has too many problems to be able to solve them without any outer help. I agree that the main reasong of such a step is getting additional votes and all ways are good to survive. Besides noone will stay near the owners of small business when they vote and make them make a right choice.