www. Loan mart .com

www. Loan mart .com

More good news for small businesses that might, while they are still young, see loans available again. I know you've heard this before, but I think it is rolling toward the real thing this time. The U.S. Treasury Department, as part of the Obama stimulus plan, will start loaning money to investors by March 31, 2009, as part of a bank rescue fund. Remember that as of October of 2008, according to the National Small Business Association (NSBA), the secondary market for selling small business loans froze. Now as much as 15 billion of the 700 billion in TARP money will be made available for this secondary market. The NSBA is calling for at least 3 billion of this to purchase SBA 7(a) pooled securities.

As a small business owner you may ask: "What is secondary market and why should I care about it?" Well, you should. After a bank makes a loan, it packages them in pools and sells to investors on the secondary market who purchase at a premium. So if you have $100,000 loan and it is sold at a premium of 115%, the bank gets back $115,000.. With new money into its coffers, it loans to other businesses and the cycle continues over and over again. What happened lately is the secondary market has dried up and so banks aren't loaning. With the reviving of that market, they will hopefully get down to business again.