Government 30 Billion Dollar Small Business Lending Fund: No Money Spent in Nine Months!

[Better Believe It]

Small Business Lending Fund: No Money Spent in Nine Months
By: David Dayen
June 22, 2011

I don’t think we’re making enough out of incompetence as a primary reason we’re mired in a zero-growth decade. For instance, the Federal Reserve, empowered with enormous control over the economy, simply didn’t perform well over the last three years in using unconventional monetary policy to give a boost to the economy. They left the real possible actions that could have driven some economic improvement on the table, and what they did end up doing didn’t have much of an effect.

Nearly nine months after its formation, a $30 billion government fund to foster small-business lending has yet to pay out a single dime, even as the nation struggles with traumatic levels of unemployment.

Now, Rep. Sam Graves (R-Mo.) wants an explanation. And as chairman of the Small Business Committee, he hopes his sole witness at a hearing Wednesday — Treasury Secretary Timothy Geithner — can shed some light on the holdup.

“This isn’t a witch hunt in any sense of the word,” Graves said. “We’re just trying to figure out why the fund isn’t performing as advertised.”

Read the full article at:

http://news.firedoglake.com/2011/06/22/small-business-lending-fund-no-money-spent-in-nine-months/

[OhioChick]

1. Rec n/t

[Donnachaidh]

2. kick and Rec! n/t

[jillan]

3. Another wtf moment brought to you by our government.

[Bonhomme Richard]

4. Bottom line. Banks don't like to lend money to those who really need it.

Try to get a loan for a struggling business if you don't have any assets to repay it if you default. You don't. It wouldn't surprise me if the hold up is the treasury trying to figure out how vulnerable they will be for loan defaults. The banks are not going to take the hit so they want the treasury to write the guidelines and take the hit if the loan isn't payed back.
Keep in mind that the people doing that are probably ex bankers themselves.

[Autumn]

7. Seems Treasury is in charge of implementing it, From the article,

"Sen. Jeff Merkley has been extremely frustrated with the slow pace of Treasury in setting up the Small Business Lending Fund – and urged Treasury last month to pick up the pace,” they said. Simply put, Merkley’s office believes this fund should be the highest priority at Treasury, especially with unemployment so high, and he doesn’t see that kind of commitment yet." Maybe he can kick Timmy in the ass and get him going.

[Autumn]

5. Who's that guy in charge of Treasury again?

Oh yeah, Geithner. There should be a witch hunt since he is involved. K/R

[ProSense]

6. "Now, Rep. Sam Graves (R-Mo.) wants an explanation."

I'm sure he does.

Republicans are pushing really hard for more jjob creation.

:rofl:

[ProSense]

8. Here

Reuters

<...>

He said that bank regulators, which must approve the requests before passing them onto Treasury, wanted to ensure that capital was not disbursed to banks that are not viable.

"We can't justify helping to keep them alive," Geithner said of such banks.

The Treasury chief said that so far, the program has received 869 applications from banks for about $11.6 billion in capital, or just over one third of the available funds.

Treasury will soon begin to disburse funds from the program, which aims to leverage $300 billion in new bank loans to small firms, which are considered an engine of job growth in the U.S. economy.

<...>

Maybe the Republicans can get rid of the regulators? Speed everything!!!!

[SoCalDem]

9. Would you open a new business right now?

People are in hunker-down mode. New businesses fail more often than they succeed, and small businesses that are truly "small" fail all the time, even after years of being in business. The margins are so narrow, that a few "bad" months can sink them for good.

We have a crisis of confidence (total lack of it for many), and a lessening demand for "stuff". There will always be those who either have money or available credit , and who will buy stuff & go to restaurants,etc. but most businesses have to cast a large net to attract a lot more customers than the "eager" consumers.

[Better Believe It]

10. The article was not about me. But, thousands who want to have not been loaned the money they need.

I see new small businesses open every week.

Many more would open if they could obtain small business loans.

So what's your point?

That all truly "small" businesses always fail and therefore none should be given loans out of this 30 billion dollar fund?

[SoCalDem]

12. Never said it was about "you"..or that small businesses "always" fail

thanks for playing, though:hi:

[xchrom]

11. Kinda hard to complain that businesses sitting on their cash won't spend

When government won't do the same.