Nov 6, 2008

President-elect Barack Obama proposed emergency assistance for small business endangered by America's financial crisis several weeks ago, calling for a "small business rescue plan" of tax incentives and loans.

"Small businesses employ half of the workers in the private sector in this country, and account for the majority of the job growth. But we also know that a credit crunch has dried up capital and put these jobs at risk - shops can't finance their inventories, and small firms can't make payroll," Obama had said at a campaign rally in Ohio. "If we don't act, we'll be looking at scaled back operations, shuttered shops, and laid-off workers."

Obama's campaign platform already featured pledges aimed at small businesses, including proposals for eliminating capital gains tax on gains from investments in startups and for a tax credit for businesses that offer workers health care. What's new is his call for an emergency lending facility run by the Small Business Administration to shore up struggling companies imperiled by the credit crunch.

A paper detailing Obama's proposed "Small Business Emergency Rescue Plan," released by his campaign in October, expands on the remarks.

Obama's plan calls for the SBA's loan guarantee programs to temporarily eliminate the fees they charge lenders, and for the agency to increase the guarantees it offers to banks that lend to qualifying small companies. Additionally, he wants the SBA to expand its facility for directly lending money to small companies through its Disaster Loan Program.

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