US gov’t unveils aid for small businesses

Agence France-Presse

The U.S. Treasury said it will move to ease a credit freeze to small businesses by pumping up to $15 billion into the sector. The effort to buy up securities linked to small business loans aims to "jump-start" credit in the sector, which has been frozen because investors are unwilling to purchase bundled loans that are "securitized."

President Barack Obama, discussing the new effort, said it was being launched in response to a situation where "small businesses are struggling even though they're maintaining profitable businesses (because) their credit lines are being pulled."

Obama added, "This is still just going to be a first step in what is going to be a continuing effort to make sure that people get credit out there."

The action by the Treasury comes on top of a move by the Federal Reserve to pump up credit for business and consumers hurting from a global credit crunch, with the banking system reeling from massive losses linked to the housing meltdown.

New data from the world's biggest economy showed industrial production falling in February by 1.4 percent from January. The decline was compounded by U.S. Treasury data showing foreign investors sold a net $43 billion in long-term U.S. securities in January.