Obama outlines small-business credit help

WASHINGTON, Oct. 21 (UPI) -- President Barack Obama refocused the U.S. government's $700 billion bailout program, announcing two initiatives to help small-business owners.

Obama announced the plans during a visit Wednesday to Metropolitan Archives, a family-owned business in Landover, Md.

"These companies are the engine of job growth in America. They fuel our prosperity," Obama said. "The problem is, our small businesses have been some of the hardest hit by this recession. ... And because banks shrunk from lending in the midst of the financial crisis, it has been difficult for entrepreneurs to take out the loans they need ... ."

He noted that the American Reinvestment and Recovery Act addressed some issues facing small-business owners and entrepreneurs, but more was needed.

One initiative -- available through the Troubled Assets Relief Program -- would support small-business lending by providing lower cost capital to banks that provide small-business lending plans, and to community financial institutions that lend to small businesses in hardest-hit rural and urban areas, he said.

"The major banks that were in critical condition a year ago need no new assistance from the government, and so we are winding down that portion of the TARP program," Obama said. "But to spur lending to small businesses, it's essential that we make more credit available to the smaller banks and community financial institutions that these businesses depend on."

Obama said he would seek legislation to raise the cap for three types of Small Business loans available that would help borrowers to acquire machinery, land or equipment, or expand payroll.

Finally, Obama said he would direct Treasury Secretary Timothy Geithner and Small Business Administration Administrator Karen Mills to convene a conference of regulators, congressional leaders and small-business owners to examine and establish other steps the government can take to help small businesses gain access to credit.