The Venture Edge

Today -- Sunday, October 3, 2010 -- marks the official end of the Troubled Asset Relief Program, better known as TARP. As you may recall, TARP was signed into law by President George W. Bush on October 3, 2008, at the height of the U.S. financial meltdown triggered by the subprime mortgage crisis. The original plan was to authorize up to $700 billion in spending to buy up (surprise, surprise) "troubled" assets, which included those bad mortgages and other questionable financial instruments. As it turned out, the government ended up not spending anywhere near $700 billion and in July of this year, the Dodd-Frank Act put a cap of $475 billion on TARP.  

Small business owners are some of the brightest and hardest working people on the planet.  They have to be because they now find themselves competing in a global environment for customers, employees, suppliers, and distributors.  And their competitors are coming from places they had never even heard of.  It's not your grandma's small business anymore.  So are SB owners going to rush out to grab up the announced government subsized loans through the SBA?  I'm not so sure

As I mentioned in my January 27, 2010 post, it was looking increasingly likely that President Obama would soon announce help for America's small businesses. That day has finally come. According to a White House press release, Obama will today announce a new Small Business Lending Fund, funded to the tune of $30 billion redirected from TARP. Interested? Check out the press release, then drop by your banker's office and get in line. I suspect this will be a VERY popular program.

The golden Cinderella carriage that is the federal Troubled Asset Relief Program -- TARP, for short -- will in just a month-and-a-half's time become a pumpkin when legislation that authorized the Department of Treasury to buy or insure up to $700 of "troubled assets" expires on December 31, 2009. The funny thing is that, as of October 1, 2009, more than $317 billion of the $700 billion remained unspent. Why? The exact reasons are fuzzy, but maybe there just aren't that many more troubled assets for Treasury to buy up or insure.

If you've got a small-ish business and you're looking for financing, you know that there are plenty of challenges. One of these challenges is the fact that many banks are still holding back on making loans at all. Another challenge is that companies are bumping up against the SBA (Small Business Administration) loan limits. Fortunately, progress is being made in Congress to help in both these areas.