Will Small Banks Get Their Own TARP?
September 9, 2009 by Miranda Marquit
Filed under Finance
One of the issues right now in corporate finance is concern over the solvency of banks. The largest banks received emergency loans and other help from TARP programs offered by the U.S. Treasury and the Federal Reserve. But many small businesses actually get their financing needs fulfilled through smaller regional and local banks. And these banks may be in trouble.
Bank failures may be a problem for smaller lending institutions
There are estimates that as many as 1,000 small banks could fail in the next two years. And with that, corporate finance could continue to have problems — especially the small businesses that form the backbone of our business economy.
In order to help these businesses, small banks are sending their own lobbyists to Washington to help influence the development of TARP for their use. The idea is to set up a program that would allow financing for small banks with a match program. If banks can secure $10 million from private investors, they can receive $10 million in TARP funds.
This sort of program would be very helpful for many regional banks — and even some community banks. The fact that the government would provide TARP help would encourage investors to be more open to putting their money in banks. And, if these small banks are in a better place financially, they might be more willing to lend to small businesses, un-clogging some of the corporate finance process.
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Check out what others are saying about this post...[...] get creative with their financing. For many small and local businesses, the fact that the community banks themselves are having trouble with financing is putting the squeeze on their own projects. The fact of the matter is that entrepreneurs and [...]
[...] Leave a Comment // Bank bailout measures are being phased out right now, says Treasury Secretary Timothy Geithner. Even though most of the bank bailout funds came under the Bush Administration, the Obama Administration still offered some help to banks, and had “placeholder” money set aside for “just in case.” However, Geithner says that the money probably won’t be needed going forward. (Although he didn’t say much about whether or not small still-struggling banks might see some TARP money.) [...]