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Loan plan to aid car dealers, suppliers

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Loan plan to aid car dealers, suppliers

David Shepardson / Detroit News Washington Bureau

Washington -- President Barack Obama signed a $42 billion small business bill Monday that is set to boost some struggling auto suppliers and make it easier for auto dealers to get financing.

At a White House ceremony attended by Michigan Gov. Jennifer Granholm and Sen. Carl Levin, D-Detroit, Obama said the bill would cut taxes on small business and help them get loans to expand or diversify.

"It was critical that we cut taxes and make more loans available to entrepreneurs," Obama said. "Small businesses produce most of the new jobs in this country. They are the anchors of our main streets."

The bill also raises the cap on a pilot program for auto dealers to obtain financing for their inventories from $2 million to $5 million through the Small Business Administration. Most auto dealers should qualify for the program.

A key portion of the bill was patterned after a $12 million Michigan program designed to boost struggling auto suppliers' access to loans.

Many have seen the value of their collateral -- factories and equipment -- drop and are unable to get loans to expand or diversify into other sectors even if they are creditworthy.

The $1.5 billion federal loan program will award Michigan $81 million that should help businesses obtain nearly $800 million in loans and create or retain 11,000 jobs in the state, Granholm said.

But the Michigan Economic Development Corp. estimates that state businesses could use $1 billion, so Granholm expects the program to be oversubscribed.

U.S. Rep. Gary Peters, D-Bloomfield Township, helped shepherd the bill through Congress. "Putting capital in the hands of our small businesses and entrepreneurs is one of the best things we can do to spur job growth," he said.

From The Detroit News: http://www.detnews.com/article/20100928/NATION/9280355/1148/auto01/Loan-plan-to-aid-car-dealers--suppliers#ixzz10pO4Nk5v

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