New York (CNNMoney.com) - President Obama called on Congress Tuesday to recycle $30 billion of the remaining Troubled Asset Relief Program (TARP) funds into a new government lending program offering super-cheap capital to community banks that boost their small business lending this year.
Touted last week in Obama's State of the Union address, the plan is the latest incarnation of a proposal the president first floated in October. While credit conditions for large businesses have improved over the past year, small companies are still widely reporting problems finding the capital they need to fund their operations.
Since small businesses employ about half of American workers, policymakers worry that the ongoing credit crunch they face is contributing to the nation's high rate of job losses. Improving the job market "must be our No. 1 focus in 2010," Obama said last week.
At a town hall meeting in Nashua, N.H., Obama unveiled his proposed new Small Business Lending Fund. The initiative targets banks with assets of under $10 billion, which collectively account for more than half of the nation's small business lending, according to White House estimates.