An article in the Financial Times made pleasant reading, the government (or us taxpayers if that makes you feel even better) has made a profit of over $10 billion on the 49 companies that have returned TARP funds so far. A pleasant surprise. Obviously those that pay early are not the problem loans, it is going to be the tail end of TARP that will have some of the teeth grinding elements. For the finance community aspect of the TARP lending an overall profit of $76 billion is expected. A more pleasant surprise.
Yes there is a but, at least two of them, AIG and the car industry, which should take the shine of the above turning it into a projected overall loss of $117 bn. Still in the new world where we bandy around billions with impunity, thats much better than what we thought last year.
So with this extra money lieing around (or a smaller money pit depending on your life view) this must mean for small business the credit crunch is going to get easier. Well if it does, it does not look like it will be with Washington’s assistance. The US Chamber of Commerce announced it has just organized 200,000 letters being sent to politicians regarding the Hill’s response to the financial meltdown, the Consumer Financial Protection Agency. Yes, it would seem that politicians response to deal with a tumor in the head is to cut off a leg. Worth checking this legislation and new proposed agency out, it looks like it could lead to restricted ability for lenders to finance small business and those who finance small businesses.
For those in small businesses or involved in small business lending this is a space well worth watching and maybe adding to the Chambers’ 200,000 letters.
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