Obama's Remarks to Small Business Owners, Community Lenders, and Members of Congress - Page 4 of 6

Obama’s Remarks to Small Business Owners, Community Lenders, and Members of Congress

and lower spending, which leads to less lending — a vicious cycle that delays our recovery. And small businesses don’t just provide jobs — they provide the innovations that help us lead in the global economy.

Smaller companies produce 13 times more patents per employee than large companies. Now, think about it. Hewlett-Packard began in a garage. It was a small business. Google began as a research project — small business. The first Apple computers were built by hand one at a time — small business. McDonald’s started with one restaurant. Marco, I know you’ve got ideas. (Laughter.) Small business.

Our recovery in the present and our prosperity in the future depend upon the success of America’s small businesses and entrepreneurs. And that’s why my administration has already taken aggressive action on their behalf.

My recovery plan, as already been noted, raises the guarantees on SBA loans to 90 percent and eliminates costly fees for borrowers and lenders that can be too costly in a recession. And these changes are being implemented now, fulfilling a campaign promise that I made. The recovery plan also includes a series of tax cuts for small businesses and tax incentives to encourage investments in small businesses. And the Treasury Department has launched the Consumer and Business Lending Initiative to help unfreeze the credit markets.

I’ve also proposed, as part of my budget, that we reduce to zero the capital gains tax for investments in small or startup businesses — expanding and making permanent one of the tax cuts in the recovery plan. And my budget, as part of our health care reform efforts, calls for tax credits and other assistance to help small businesses offer coverage to their workers.

So we’ve already done a lot. But we’ve got to do more. And none of these steps will be effective unless we unlock the credit markets that are denying small businesses the loans they need to grow.

Therefore, as part of my Financial Stability Plan, the Treasury Department will begin purchasing up to $15 billion of SBA loans through the Troubled Asset Relief Program, or TARP. We will immediately unfreeze the secondary market for SBA loans and increase the liquidity of community banks. Cynthia’s bank is going to be able to sell those $11 million loans so that she’s got more money to lend. (Applause.)

So with this action, any lender that provides SBA small business loans will have a buyer for those loans. And in turn, community banks will no longer have to choose between providing loans to creditworthy small businesses and maintaining the required capital and liquidity.

Now, this plan is the latest step —- but by no means the last step —- in our ongoing efforts to stabilize the financial markets on behalf of businesses and consumers. We’ll be outlining further steps on behalf of small businesses in the weeks and months ahead. And we will continue to do whatever is necessary to lead this economy out of recession and lay the foundation for long-term prosperity.

That’s what the small business owners in this room