Small businesses, community bankers may snub Obama’s $30 billion loan program

By Pallavi Gogoi, AP
Friday, September 24, 2010

Small biz, banks may spurn Obama’s $30 bln program

NEW YORK — President Barack Obama’s $30 billion small community business lending program faces one big challenge: many of the community banks and businesses it’s supposed to help don’t want it.

The lending program is part of a bill that passed the House of Representatives Thursday and awaits the president’s signature. The legislation contains a mix of tax cuts and credits aimed at helping small businesses. The centerpiece of the bill is an effort to make billions of dollars available to community banks for loans to small businesses.

It seems like a simple effort to unclog a credit pipeline that has been blocked since the financial meltdown two years ago. But interviews with community bankers and small business owners show a reluctance to participate.

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