Source:
Market WatchWASHINGTON, Nov 13, 2008 Changes to Small Business Program will Aid Ailing Firms
Upon the urging of Sen. John Kerry, Chairman of the Senate Committee on Small Business and Entrepreneurship, and Sen. Charles Schumer (D-NY), a senior member of the Senate Committee on Banking, the Small Business Administration (SBA) is changing two aspects of their lending programs that will help ease the credit crunch.
"I've been pushing for these changes since May 2007, but the Administration refused to act and blocked Congress when we tried to do it in a bill. After much urging from both sides of the aisle I'm happy that the SBA has finally decided to step in to provide some relief to small firms," said Kerry. "These are easy administrative changes that should have been made before our long-building credit crunch spun out of control."
One of the changes being made by the SBA would give lenders the discretion to use an alternative variable interest rate to the Prime interest rate. Lenders will now be able to use the London Interbank Offered Rate (LIBOR). Additionally, the SBA will allow loans with various interest rates to be pooled for sale on the secondary market rather than allowing only loans with the same rate to be pooled. These various rate pools are also known as Weighted Average Coupon (WAC) pools. The changes published in the Federal Register today will improve small business lending and make it easier for banks to sell the loans on the secondary market.
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http://www.marketwatch.com/news/story/Kerry-Schumer-Lending-Proposals-Implemented/story.aspx?guid={F03E6D0B-22AC-460C-936C-A83FC2A2A540}
:thumbsup: KERRY!