Senator Warner and 32 of his Senate colleagues are urging the Obama Administration to do more to support America’s struggling small businesses by increasing the availability of credit.

In a letter signed by one-third of the U.S. Senate, Senator Warner outlined a targeted, short-term plan to move a portion of the unused bank bailout funds established last fall into a new loan fund.  With the help of local lenders, that fund could be used to “unclog” the frozen credit lines to small businesses.

Senator Warner’s proposal would require participating banks to contribute a portion of their own funds in offering loans to creditworthy small business owners. Community-based banks have extensive experience in evaluating and managing small business loans, but turmoil in the financial services industry over the past year has prompted many banks to curtail or even stop their small business lending activity.

The letter says:

“We believe that an additional $50 billion in loans to small businesses, primarily through our community banks, would both refocus the TARP to help Main Street and lead to more job creation.”

Senator Warner wrote the letter after meeting with hundreds of small business owners, retailers, and lenders across Virginia, who expressed frustration with limited access to credit and slow-moving government programs. He said today:

“There have been promising signs in recent months that our economy is turning the corner, and it is important that we do what we can, in a responsible way, to support our small business owners so they can continue to meet payrolls and inventory requirements until we're finally out of the woods. We are not suggesting a 'bailout,' but we have recommended a smart strategy to re-boot the credit market that serves our independent businesses and entrepreneurs."

The letter, written by Senator Warner and signed by one-third of the U.S. Senate, is below:

Letter to President Obama on Small Business Lending

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