Small biz promises: Where Obama stands

President Obama has pledged to help Main Street where it is hurting the most. Here's a look at where he's followed through -- and where he hasn't.

1 of 4
BACKNEXT
Credit crunch
What he said: "That's why we need a Small Business Rescue Plan -- so that we're extending our hand to the shops and restaurants; the start-ups and small firms that create jobs and make our economy grow. Main Street needs relief and you need it now. We won't grow government -- we'll work within the Small Business Administration to keep folks afloat, while providing tax cuts to lift the tide. It's what we did after 9/11, and we were able to get low cost loans out to tens of thousands of small businesses."

- October 10, 2008, Chillicothe, Ohio

What happened: Recent efforts to help small businesses haven't mirrored those implemented in the aftermath of 9/11, but new measures from the stimulus have been productive. Obama's $787 billion stimulus plan includes incentives for banks to make more loans backed by the Small Business Administration. The program temporarily reduces fees associated with those loans and ups the loan guarantees to 90%.

The plan also calls for a new initiative known as "America's Recovery Capital," which allows viable small businesses to receive interest-free loans of up to $35,000 to pay down existing debts.

But lending activity remains down, primarily because banks still see small business loans as a huge risk. (According to one analyst's report, their 2008 failure rate hit almost 12%, compared to 2.4% in 2004.) Banks also hesitate before making SBA-guaranteed loans because they cost a great deal to administer -- regardless of the loan amount -- and because the agency can back out of these guarantees even after banks make the loans.


NEXT: Health care
Email | Print | Share  |  RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
LAST UPDATE: Aug 07 2009 | 2:00 PM ET
Sponsored by
More Galleries
7 lifehacks to eliminate your holiday hassle Whether curating the perfect gift or finding a pet-sitter, these startups offer time-saving services that might just seem like holiday magic. More
San Francisco: The best city to make things From electric motorcycles to death shrouds, San Francisco's manufacturing sector is booming. More
6 designers shaking up fashion These designers are changing the way we dress, accessorize and shop, from custom made-to-fit dresses to smart jewelry that's actually stylish. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.