WASHINGTON Two industry associations hailed President Barack Obama's proposal to aid small businesses as an important initiative to help get the ailing economy back on track.
Officials of the National Restaurant Association and the International Franchise Association both applauded the administration's push to make it easier for small-business owners to borrow money.
The president announced on Monday that the government planned to kick-start the frozen credit markets by acquiring $15 billion in securities held by community banks.
Calling small businesses "the heart of the American economy," Obama said, "Less lending leads to fewer jobs and lower spending, which leads to less lending, a vicious cycle that delays our recovery."
Beth Johnson, the NRA's executive vice president of public affairs, said: "Our members are telling us they need credit, especially those looking to expand and create new positions. The president's proposals should help restaurateurs and small-business owners across the nation succeed in this very challenging economy."
IFA president Matthew Shay said the administration's "direct intervention in the small business secondary loan market is the missing piece of the small business lending puzzle. The low level of credit available has made it difficult for many businesses to create jobs and help lead us out of this recession."
In addition to injecting $15 billion into the credit market, the administration also said it plans to eliminate some borrower and lender fees on loans originated through its main loan program while allowing small businesses larger tax breaks on operating losses.
The program also would increase federal guarantees under the Small Business Administration's 7(a) Loan Program.
"Expanding the flow of capital to the restaurant industry is a critical component of job creation and preservation," Johnson said.
Contact Paul Frumkin at [email protected].