The National Minority Business Council Applauds President Obama’s Plan to Aid Small Businesses

NEW YORK – The National Minority Business Council, Inc., hailed President Obama’s plan to keep small businesses from failing during the current economic downturn as “extremely positive” and called for the establishment of a separate entity under the auspices of the U.S. Small Business Administration to monitor the compliance of banks and other lenders with the new measures.

The NMBC also called upon the U.S. Treasury Department to establish a targeted $5 billion rescue fund from which loans would be extended directly to eligible small and medium-size enterprises, just as bailout funds were disbursed directly to banks under the Troubled Assets Relief Program.

“President Obama’s plan acknowledges the critical role of small businesses, including minority, women and veteran-owned enterprises, as the engine of economic growth and job creation. The NMBC is pleased to see that the plan takes immediate action to jumpstart credit flows to this very important sector. We would like to see a Small Business Economic Council put in place to monitor whether lenders are doing the right thing as the plan stipulates. We also would like to see a $5 billion fund established to rescue qualified and eligible small and medium-size enterprises. The performance of this fund would be overseen by the Treasury Department, the SBA and the proposed Small Business Economic Council,” Robinson said.

President Obama and Treasury Secretary Timothy Geithner this week unveiled a Consumer and Business Lending Initiative, under which the Treasury Department will buy securities backed by SBA loans in order to unfreeze lending and will stand ready to purchase new securities “to ensure that community banks and credit unions feel confident in extending new loans to local businesses.” The initiative requires the 21 largest banks receiving federal bailout funds to report monthly on how much they lend to small businesses and all other banks receiving such funds to report quarterly on small business loans. The administration called on banks that are not taking government funds to “make an extra effort” to increase small business lending.

NMBC Board Chairman Gregory L. Reid, Esq., said: “The administration’s plan to unfreeze credit for small businesses is extremely positive. It paves the way for minority, women- and veteran-owned businesses to enhance their operations and better compete for contracts tied to projects under the broader economic stimulus legislation.”